How Beats went from a single pair of headphones to a $3 billion Apple acquisition

“There’s one sense in which Apple and Beats are certainly a perfect match — there are no other tech companies on the planet so likely to divide tech fans,” Luke Westaway reports for CNET. “But love ’em or hate ’em, Beats has, in a remarkably short space of time, turned one pair of bass-heavy headphones into a vast music empire.”

“A recent Statista survey found that 46 percent of US teens are planning on making Beats their next headphone purchase,” Westaway reports. “The company isn’t universally loved however, and Beats — which was created by co-founders Dr Dre and Jimmy Iovine, initially in partnership with high-end audio firm Monster Cable — regularly draws the ire of audiophiles.”

“Beats was never courting the enthusiast crowd however” Westaway reports, “instead building fashionable gadgetry for people who’d never otherwise have considered spending $300 on a pair of headphones, and leaning on co-founder Jimmy Iovine’s extensive music biz contact book to get the Beats brand into the public consciousness.”

Learn how Beats’ savvy marketing turned the brand into a powerful force, one that Apple was only too happy to thrown down $3B to acquire, here.

Related articles:
Apple officially welcomes Beats Music and Beats Electronics to the Apple family – August 1, 2014
Beats $3.2 billion sale to Apple proves it’s great, but not necessarily at headphones – July 18, 2014
How Jimmy Iovine, Dr. Dre and Ian Rogers could transform Apple’s tech culture – June 6, 2014
Apple insiders: Arrogant Apple managers are the reasons why iTunes Radio sucks, Ping failed, and Apple had to buy Beats – June 5, 2014
Apple’s Beats buy is two-sided for music streaming rivals – June 1, 2014
Apple paying under $500 million for Beats Music streaming service – May 30, 2014
With Beats, Apple has its next iPod – May 29, 2014
Jimmy Iovine: Apple’s new music impresario – May 29, 2014
Tim Cook: Beats acquisition a ‘killer’ deal for Apple – May 29, 2014
Did Tim Cook just pay $3 billion for his successor, Jimmy Iovine? – May 29, 2014
Steven Levy: With Beats Music service, Apple’s Tim Cook goes against the wisdom of Steve Jobs – May 29, 2014
Apple + Beats = MTV? – May 29, 2014
Eddy Cue and Jimmy Iovine: Steve Jobs would be extremely proud of Apple today – May 29, 2014
Jimmy Iovine brings his own brand of ‘reality distortion field’ to Apple – May 29, 2014
JPMorgan: Apple may spin-off Beats Electronics business – May 29, 2014
Apple CEO Cook: Beats deal a ‘no-brainer’ – May 28, 2014
Tim Cook’s internal memo to Apple employees regarding Beats acquisition – May 28, 2014
It’s official: Apple acquires Beats Music and Beats Electronics for $3 billion – May 28, 2014


      1. So, you have no point. Other than a thinly veiled deflective defense of Apple making the largest and worst acquisition in company history.

        Fashion crap. Welcome to the NEW Apple.

        1. If Tim Cook thinks that Beats Music and, more importantly, Jimmy Iovine are worth the $3 billion of the entire Beats package, I’m inclined to believe him. Especially since his “new Apple” has thus far been doing a great job otherwise.

          You have no clue what the big picture is. The folks running Apple aren’t stupid enough to just buy “fashion crap.” There’s a larger purpose behind the acquisition, and it will reveal itself in time.

          See, you have no point either because you have no clue why Apple purchased Beats or what they intend to do with it. You just think it’s a company that’s created a crappy product and marketed it well. Your assessment of the situation is shallow, uninspired, detached from reality, and will be proven wrong. Good day.

  1. The most I ever spent on headphones was $99. Even that, I felt, should have been cheeper.

    I am not an audiophile, but I do want quality and accuracy. So to spend $300 on something that can be bested for less than $100 doesn’t make sense.

    1. You are not an audiophile, yet you say you want quality and accuracy, and you claim that a $300 headphone can be bettered by one for less than $100.
      Your ignorance of the subject is abundantly clear.
      It’s perfectly possible to find earphones and headphones for $50-90 that are acceptable sound-wise, especially for those with less discriminating tastes.
      However, quality of construction and materials will be far removed from those of more expensive ‘phones, and the sound will be compromised.
      Beats Solo HD ‘phones are really well made, have replaceable cables, something cheaper head-and-ear-phones will not have, but the sound is compromised due to the market they are aimed at.
      That, however, is very easily remedied, making Beats ‘phones easily as good as any others on the market, like B&W P3’s.
      I know, because I have a pair, and using EQu*, they are excellent ‘phones, although not as good as my $350 UE TripleFi 10 Pro IEM’s
      *equalisation app from the App Store.

  2. The Anti-Apple crowd always scream that Apple is all marketing and no substance. We all know that’s not true, but it doesn’t help when they buy a headphone company that’s all marketing and no substance

  3. Beats got huge for primarily ONE reason — BASS. People like bass, and they like it heavy. Particularly rap music, dance music, and electronic music. In case you haven’t noticed, the vast majority of contemporary music has at least strong elements of these 3 categories. So for everyone who says it’s all “marketing” blah blah blah, you’ve missed the mark. Beats gave the people what they WANT.

    1. Exactly right, and it isn’t difficult for Apple to modify Beats ‘phones to give the audio snobs what they want, too.
      Beats have already done that with the Solo 2’s.

  4. Google paid 3.2 billion for Nest which makes estimated 300 million in annual revenue (i.e. bought for 10x revenue)

    Apple paid 3 billion for Beats which made 1.3 billion last year (less than 3x revenue).

    If Apple overpaid didn’t Google overpay far worse? Weird that people praise Google and bash apple…

    for Beats Apple got the headphones (biggest seller in the world and growing fast), music service and talent to help Apple in music (iTunes is a giant business) and marketing talent. Nest is a struggling tech company by far not the No.1 in it’s field and being bashed by Honeywell etc and has product recalls (recalling 440,000 smoke detectors) etc.

    Looking at it it looks like Apple’s Beats purchase is way more sensible.

    Think about it if Beats MARKETING talent (Beats haters say the headphones suck so to sell so much it’s marketing must be GREAT!) can help Apple sell an EXTRA 5% more iPhones, iPads, Macs, iTunes products a year that’s hundreds of millions of dollars on top of the headphone profits etc.

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