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Why Would Apple Drop $3.2 Billion on Beats?

Apple is reportedly set to buy Beats Electronics, maker of premium fashion headphones and the Beats Audio music streaming service, for $3.2 billion. Macworld’s Dan Miller suggests a few compelling reasons why, such as Beats’ curated music service and the industry credibility of co-founders Dr. Dre and Jimmy Iovine.favicon follow link


Comments about Why Would Apple Drop $3.2 Billion on Beats?
(Comments are closed.)

Benjamin Lowengard  2014-05-10 05:05
Ok, I'll join the fray of the puzzled folks- this is a ridiculous thing unless Beats has some "nuclear" sort of device in their otherwise mundane arsenal. (i think subscription music is a lousy thing for a LOT of reasons)
I'd rather that Apple buy Bang & Olufsen though i still couldn't afford that stuff...
This is a brilliant move by Apple! The problem with American businesses is they think short term and tactical. Apple is making a strategic move to get buyer of Beats to convert to Apple products.

Answer this question. What type of laptops do Beats owners buy? Based on what I see in public (from living in airports and Starbucks) they buy windows based machines and Android phones.

Beats is a cool product in an affordable price range. I am over fifty, use oredominately Apple products, 2 IPads, 1 iPhone 5, and a MacBook Pro. Watch Apple start synergizing a new kind of Cool and match products for Beats. Oh yeah the streaming music and product are part of it. Apple is going to capture a demographic of users they don't have today. And buy the way, made in USA
John D  2014-05-10 09:26
Beats is useless "technology" and it's a low brow brand. Hyped up like no other. Consumers who know REAL quality don't buy Beats.

Yeah, it makes money. Stupid people money. Do you want to be a stupid people brand, Apple?

I guess the answer would be, "Yes."
A agree, we have much better brand her e in the USA, Beats audio is an over priced brand that uses its brand name hype and Dre's name in order to make sells.
james tauss  2014-05-10 10:37
Marketing. Kinda like the 'Pet Rock' idea? Sure, stupid people money. But who's laughing all the way to the bank?
Why should they change their target market now? Pragmatic (and smart) folk observe Apple having the highest profit margins in the industry while providing the same components as every other manufacturer. Cover that device in some shiney white plastic, remove any customization options so as not to confuse the simpleton consumer, and give it an "I" name, and Voila! you just got someone to pay a premium for nothing. They're a brand who's bread has always been buttered by stupid people, subseptible to groupthink behavior. Beats is right up their alley.
Well said. 'beats' has nothing Apple needs, and plenty of negative vibes that Apple does NOT need. Bad move on Apple's part if this comes to pass.
I think this is a smart buy at least in the short term. These headphones are extremely popular. They aren't audiophile quality by any means, but they are far better than the headphones produced by Apple currently.
This is not true. Apple's In-Ear Headphones have a good reputation and are considered excellent value when bought at a discount. They are great for those looking for a flat frequency response and natural sound in an iem (in-ear monitor), specially if you cannot easily buy HiFiMan headphones or if you don't want to spend $300+.

As for the earbuds, considering that type of headphones will never be anything great, Apple's offering was great:

I see no value at all in Beats from a hardware perspective, and its brand would be useless to Apple, unless they really want to dilute and branch Apple's own brand.

The streaming side of things is what makes sense, even if not much.
the streaming side even makes no sense. It's 3rd-rate quality at best, and is a rounding error compared to the market share of something like pandora or spotify. Plus, Apple can easily spin up their own streaming service if they so desired.