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.
Beats and Apple...a match made in marketing heaven!
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?
My thinking was thus:
MOG sold out to Beats and I'm sure Beats made MOG sign a non-
compete agreement. This agreement would be between MOG and
Beats not MOG and Apple. So "maybe" MOG could
restart a new service and not violate any conditions that
they had with Beats. Just a thought, (and a hope and
I'm not a lawyer...I just play one on TV :-)
Reading some of the business mags on line lead me to believe that MOG was struggling when Beats bought them. Also speculation is Apple was motivated more by the music service than the hardware side of Beats. So I guess my hope is that Apple will maintain the current Beats customer base by continuing things as are and allowing Android and Sonos users to subscribe. I just started my free Beats trial over the weekend as MOG shuts down in 20 days. Time will tell as it always does.
Just confirms my 'greater fool theory of investing. The way it works is that all you need is to find a greater fool to buy your 'investment' to make a profit. Value has nothing to do with it.
This will surely be the end of Beats for Sonos. It appears as if Apple is moving towards streaming which marks the end of music downloads save for High-Res.
Apple isn't perfect and this acquisition might prove to be a mistake. OTOH, they've created an incredibly valuable company, taken down a horde of more established competitors, created a slate of products that dominate their sector, and grown into one of the world's most valuable brands. I'm not sure that I'd conclude that they're anybody's fool. If they successfully lever the Beats streaming platform the way I suspect they'll try to, this might well prove to be a very shrewd move.
AFAIK, none of the independent streamers are making money. It's a tough gig as a stand-alone business, but for those with more at stake, well....
Spotify is a strategic play by a consortium of major labels and they are the only target in that business right now. It's pretty clear that that way lies the future and Apple evidently believes that Beats is the best road to get there. Until they fail, I'll reserve judgement.
I agree that the long term hidden asset is the content to populate Apple's platform of devices. My nephews all got Beat earbuds for Christmas last year. I found that they were WAY too loud and bass heavy. They really couldn't compete with my old Sony earbuds I use for exercise, yet they cost about $100. My sister didn't really care for my argument about sound quality and seemed to be more concerned about brand recognition from her kids. Therein lies Apple's interest. Some types of rock and roll are best enjoyed being played loud, but my first reaction (I guess I am getting old) to the Beats product was that the company is going to create a generation of deaf kids.
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.
Another way of looking at it is Apple is acquiring Jimmie Iovine
If you live in a yuppie town, say Madison, Boulder, Burlington,VT etc , Apple rules because to buy a PC would call your yuppyhood into question. No joke.
IISH to type words?
Just being efficient .....FWIW
Schubert, I find it odd that one who spends big bucks for superior sound would not see the merit in spending big bucks for a superior computer (or operating system).
Overall, I despise Apples products, mostly due to its closed nature and how that allows Apple to milk money from its dependent customers.
On the flip side, Apple stuff is easier to use and learn usually, so if you need that or don't mind doing things the Apple way only (and paying the premium involved at all stages as well), then well Apple is golden, as its profitability and myriads of happy followers will clearly attest to.
BTW I use my daughter's hand me down Ipod to control my Squeezebox devices. The Logitech app has bugs on Ipod. It ran quite nicely, no bugs on ANdroid tablet I had prior. Go figure!
I see the merits, having owned both, but these days an Apple is twice as much for very little better.
My point is, though they are nearly always of the opinion they
are creative and independent, yuppies in general are the most
conformist of all groups in American society.
Even the Fox News morons has more variety in their hates than yuppies do in their likes.
Yuppie? Are we back in the 1980's? Perhaps you meant hipsters? Young urban professionals no longer exist.
Funny, I know lots, perhaps there are just zombies?
i saw in passing today that spotify now claims 15 million paid subscribers, while beats music is believed to have only 300,000. (according to the same story, apple's itunes radio has some 40 million listeners; most, i presume, using the free service). which leads me to rethink my original assumption that buying beats was a shrewd move by apple, esp. since most analysts believed it was motivated by the potential of the streaming service, and not by headphone business.