Just speculating here, but I assume the point of the deal was to acquire MOG/Beats Music. Apple needs a presence/platform in the streaming space to compete with Spotify and they presumably chose this one. The brand (Beats Music by Apple?) is pretty good (even if the hardware isn't everyone's cup of tea). It will surely bring retail shelf space (and market share) for some hardware that's tangential to Apple's core business - but Apple is an unlikely buyer for that. While the purchase price may have been dictated by their headphone sales, I think it's doubtful that a desire to acquire a hardware company drove this deal for Apple.
Apple to Acquire Beats Audio
The business wires are ablaze today with the story that Apple is acquiring Beats for $3B. Curiously, the press consensus (and pre-market reaction) is that it's a bad move for Apple, either because they're overpaying or because Beats' phones are poorly regarded (a curious stance, since Beats has 70% of the premium market). I disagree--$3B is bar change for Apple and Beats, I assume, is an exceptionally high-margin cash cow with tremendous brand cachet among consumers, if not audiophiles. I'm not personally sold on Beats streaming service, but I'd be surprised if it wasn't successful. Interesting move, in any event.
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- 22 posts total
- 22 posts total