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May 8th 2014 6:19 pm

Apple in talks to buy Beats? WHAT?

Apple is allegedly in talks to buy Beats for around $3.2 billion dollars (that's .16 WhatsApps and 3.2 Instagrams for those familiar with different currencies)! You know Beats, the crazy overpriced brand that seems to be crazy popular! Though some might argue the same thing about Apple, so hey!.

Anyway, this reminds me of an interesting discussion that our friend Cass Chin posted way way back in 2011: Beats by Dr. Dre, do they suck? www.engadget.com­/question­/beats­-by­-dr­-dre­-do­-they­-...

I don't have much experience with them myself, but I haven't always had the greatest impression of them. They seem to be tuned for heavy bass response -- which I like as much as anyone -- but sometimes I just want to be able to appreciate some good tunes.

HTC had a deal with Beats back in the day. Did anyone have an HTC phone with Beats support? DId you notice a significant and positive difference compared to other mobile devices that you used?

Via: www.engadget.com­/2014­/05­/08­/apple­-rumored­-to­-be­-ac...

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8 replies

They're probably looking around and seeing that most of the Beats owners have iOS products, so there's probably a good "synergy" there or whatever.

Personally, I think you can do better (or equal) with Monoprice headphones, but then you don't get the caché that comes with the brand. Beats is a genius marketing strategy, but even though I'm not an audiophile, I wouldn't say they're worth the price.

But back on the subject, I really don't know what Apple gets by buying Beats. I suppose it's a profitable business, but they'd be banking on Beats being the "in" headphone brand for a long time to come, and that means they're betting on fashion, which is really what drives Beats sales. I wouldn't bet on a trend like that being sustainable, but what do I know? Nothing, that's what...
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I've seen some speculate that this might have less to do with hardware and more to do with the Beats Music streaming service. Maybe this is some sort of play to beef up iTunes Radio service and better compete with Spotify or Rdio?

That would be an interesting play, indeed! (Though I imagine Rdio or Spotify would be cheaper -- maybe hardware is an added bonus then...)
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Ahh, that makes more sense. I'd forgotten about that music service. I'm already so entrenched in rdio.

But it seems odd to buy an entire hardware company for a product that it seems Apple could easily make themselves. And it's not like I hear people raving about how much they love Beats Music. Other than the ads I never hear about it...
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It's really interesting to think about this. I wonder if acquiring something like beats may damage Apple's image in the eyes of anyone over 21. I do know that kids seem to love beats headphones, and perhaps this is a play in the longer term.

I am trying to find synergies between the companies, but I think they are few and far between. Beats has been all about producing many colours of the same thing, and Apple recently tried that with the 5C. Perhaps if they targeted the lower cost iPhone and beats headphones together they could draw in more of the teenager market.

I do not see Apple buying Beats based on industrial design. Apple sells headphones like the Bowers and Wilkins sets that are crafted much better (read: not prone to cracking) and made of elegant materials. I honestly think that would be a better match.

Perhaps the key is in the software that Beats has though!
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I hope this doesn't happen. I know apple wants to reinvent everything but I don't think they should do that by bringing over bad and overpriced headphone company that spends it's money advertising in rap music videos.
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This is an obvious push toward something like iTunes Streaming. Apple does this sort of thing all the time. For instance, iTunes started as Soundjam. This is obviously a much bigger and headline banner worthy acquisition, but it's still in essence, the same thing. I suspect we'll see their Streaming service later this fall, or early next year.
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I think this is a smart buy for Apple when you look at what Beats is: high profit margin products that appeal to a broad demographic. This is exactly what Apple is. Given how long Apple has been selling Beats products in their stores they have to know how well they do or don't sell. So why not pick up a highly popular headphone brand that already has an established celebrity relationship.

At the end of the day I think this is about appeasing the share holders. Apple gets criticized for not spending money, despite the fact they always turn huge profits every quarter. Apple spends some cash, gets an established brand (that is inline with their business model) and will likely make Wall Street happy.
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Looks like the Apple PR email talked about another point I was considering, this helps Apple get in better with celebrities. Beats has already established that very well (those commercials with Shermann and Kaepernick were pretty good) so that relationship is good.
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