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.
loomisjohnson
It's a great move by Apple. They have more than $145 billion in cash reserves which puts the purchase price in perspective. Beats is not well regarded by audiophiles, but it is the dominate, most widely recognized, brand of upscale headphones. Coupling the iPhone/iPod with Beats headphones is a marketing juggernaut. Nearly as important is the Beats music service which will give Apple a platform to battle Spotify and Pandora. It's close to a can't miss proposition.
I wonder if this will release MOG from Beats? I really LOVE MOG and it would be GREAT if they could stick around.
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.
I wonder if this will end the streaming of Beats via Sonos?
Since Apple would want their hardware sales to increase. As far as MOG goes it is already owned by Beats and I would bet the purchase of Beats is all inclusive. On another plain of thought maybe they will continue to allow Sonos to stream Beats as Sirus did with XM and kept both audiences captive. Looks like a bigger fish always comes along doesn't it?