many of you (as well as the business pundits) have opined that apple's real target was the streaming business, but i'm not sure--beats audio has supposedly done a good job of converting trial listeners to paid subscribers, but they're still a speck on the map (200k subscribers, many off promo plans from att vs. 3m for spotify)+ it would seem like they're cannibalizing their own itunes radio platform (i.e. how many paid itunes subscribers would also subscribe to beats or vice versa). beats' hardware does present some interesting synergy--it gives apple the major player not just in the headphone realm, but also in the whatever-you-call the portable pill/speaker area + potential in car audio, etc. the main thing it's buying, however, would seem to be brand cachet, which is always risky--not much cool stuff(nike and apple itself excluded) stays cool for a long time. still, apple is smart people, so i wouldn't bet against 'em.
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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Another way of looking at it is Apple is acquiring Jimmie Iovine. |
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