Apple, the company that turned digital music into a mainstream phenomenon, said on Wednesday that it was buying Beats Electronics, the rising music brand, for $3 billion, in a move that will help it play catch-up with rivals that offer subscription-based music services.
I still have no idea why Apple is buying these guys. Then again, that’s probably why I’m not a billionaire.
Coincidentally, I find it highly entertaining that technically, this is now an Apple product.
I know how you feel. When I heard of Hipstagram, and learned that there were millions of people enthusiastically signed up with a service that allows them to share their half-eaten lunches with each other, I knew at that very moment that I just did not understand the mindset of the average person. The same thing happened when I saw people getting excited over ‘auto awesome’, animated snowflakes in G+. There are so many things like this, from sports to reality television to the supposed ‘sex appeal’ of inanimate objects that are completely lost on me.
I often times feel like I was born in the wrong era or something.
Yeah, I hear ya. Except for sports. That I get, depending on the sport (cricket still baffles me, in a I’d rather do almost anything than watch it, kind of way. ).
Curling ?
Kochise
curling is awesome. totally understand that game. Chess on ice, it is.
But you must understand if curling is chess on ice, then cricket is chess on grass.
Nope, my brain can’t grok cricket. It goes on too long, and the action doesn’t seem that thrilling to me.
I realize other people could say the same for baseball, but this isn’t an objective truth, just a relative preference.
Yes, but you understand you don’t watch chess for the action, right, just the same with curling, which is my point. I’m not saying you have to like cricket. I’m saying it’s strange how you would like one boring sport because of its chess like qualities, but not another boring sport for the exact same reason.
Anyway:
https://www.youtube.com/watch?v=8hpUv5pp4vQ
Chess isn’t boring to me. Cricket is. These are personal preferences, rather than objective truths.
But yes, its possible to like one entity for reason A, while also disliking another completely different entity for reason A.
I like the pool in summer because its cold. I don’t like snow in the winter, because its cold. Make sense?
AGAIN, I’m not saying it’s wrong. I’m just saying it’s strange.
This is different because you’re changing the context for “reason A”. ie, you’ve included the extra term of a season. To highlight how strange it is, in a more accurate way, you would be saying:
“I like the pool in summer because it’s cold. I don’t like snow* in the SUMMER, because it’s cold”
See how strange that is?
* For semantic sense, you could change that to an indoor ice rink.
Actually the Apple products are not targeted at the average person and Beats products even less
Of course they are… that’s the whole point. They’re certainly not targeted at techies (at least not the iOS stuff).
In the most parts of the world, the average person simply can’t afford them.
If they can’t afford a smartphone that’s not of the sub-$100, 4gb of storage variety, I’d imagine they couldn’t afford a car either. So by that logic, cars are also not made for the average person.
Sure people can make the effort and buy a phone which is at least 600€, meaning about twice the average monthly income in my country (or lock them in a very expensive contract), but it would make little sense. Some do it, even more go for comparably priced top of the line Samsungs, but they are still a minority. Cars are a different story, they fulfill a different role and their price can be justified, really do you compare phones with cars?
I just want to point out the futility of the EU elections. Most peoples of all nations want out, but either the promises or the investment is too high.
The north can pay for a while, the center with Germany as the main goal can absorb lots of damage. This union can not hold when people like Gurdun Shyman gets into office.
Hopefully it fails before we have invested more into it.
As a female I do not want want my job only because i am non-male.
As a female you should listen to what is said to stay on topic. Open a reddit topic if you want to discuss EU issues.
Kochise
So Apple, often a company that gets accused for being style over substance, goes out and buys the one brand that epitomizes everything they get accused for?!
From a business standpoint, I’m sure there’s some method to this madness. But from a branding standpoint, it’s as tacky as a footballer’s wife in a Range Rover.
Either Apple is about to make another game changing play into music.
Or this is the start of the downfall of the company.. We know Tim Cook is no Steve Jobs, they’ll have a limited amount of innovation from Steve’s work before they run dry. The next thing is, how is Apple going to maintain it’s innovative lead over their competitors?
So far they’ve brought out a couple of uncustomizable machines which closed the harddrive/ram upgrade loopholes, which look pretty sexy, but where is it all going? There hasn’t been a major announcement in a while regarding new products. I think we need to see something new in the next 24 months. Iterative improvement won’t keep cutting it for much longer before the share price takes a nosedive.
I’m sure you realize that Steve Jobs didn’t invent Apple’s products. He of course had a hand in the design, but there are plenty of talented and inventive people there.
That’s exactly what makes Apple successful. They make machines that just work for a large group of people, and people are willing to pay for that. A macbook is just like a Windows laptop, except it looks nice, is built well, has little polished features like a magnetic power connector and a truly useful trackpad, and doesn’t come pre-loaded with crapware. Nothing revolutionary, just more polish than most other products.
Same schedule as always. New stuff comes in the fall. WWDC in a few days will have some stuff as well (probably more software related).
This prediction has been made for 10 years now.
Edited 2014-05-29 04:08 UTC
Have no idea why Apple is buying Beats Electronics and don’t really care one way or the other. But as far as a Macbook being “just like a Windows laptop, except..”, I think you’re close to the truth of the matter.
People buy a Mac for all the reasons you mentioned, plus the fact that OS-X offers a rock solid traditional desktop user interface that Windows 8x will never compete with. Couple that with the spit and polish a Macbook offers and you have hands down a winning combination when it comes to the Windows vs Mac battle.
The only way to improve on the Macbook experience is to do it yourself. Purchase the laptop you want then instal Linux Mint (or another favorite distro) in place of Windows. It takes less than an hour to do, provides the user with much the same experience that OS-X does, and saves the extremely steep costs involved with purchasing Apple branded hardware preloaded with OS-X.
Of course the do it yourself route is not for everyone. But for those who enjoy it the end result can be an unbeatable combination of cutting edge hardware married to a fast, secure and highly efficient Linux desktop that provides all the traditional desktop polish that Windows lost sight of at a fraction of the cost associated with a Macbook.
Just sayin’!..
Maybe they’re realising they can no longer make new things* and are now heading into conventional corporation strategy of buying others.
* ie, hype something up so much to those ignorant of recent history that they don’t realize that Apple didn’t invent it.
Winner — Dr. Dre
Loser — Apple
I bet that when you invest 3 billions, you ensured that one way or another, there is A LEAST 3 billions in gain in foresight. Now the strategy could eventually slip out to your comprehension, but it not an obligatory bad move.
Kochise
I don’t think it has anything to do with their new subscription service. It has everything to do with the Beats brand. They are buying a brand. Beats has taken a market (expensive headphones) and made it into a fashion statement. I know a ton of young people who want Beat’s headphones not because of any quality it may have but because it’s a fashion statement.
Beats have been integrating with Android phones making a Beats logo’d phone a thing to pair with Beats headphones. Apple isn’t about licensing any brand. They want to own and be the brand. This fits in perfectly with a revitalization of the iPod brand. Now you will have iPods with Beats built in and no one else will have Beats. Where will all the people who’ve invested in $100+ headphones turn to for a compatible music player. iPods and iPhones.
It’s a brand that has taken a play out of their play book, turn a commodity item into a fashion statement, and made it a successful business. That they can canabalize another music service is a bonus.
Its all about branding. Say goodbye to HTC Beats branded phones.
$3 Billion to buy a successful urban brand that fits in to the Apple ecosystem of fashion driven hardware. Chump change easy money.
Edited 2014-05-29 06:19 UTC
In the long term it will backfire. People will probably stop buying Beats headphones rather than switch to Apple phones.
You shouldn’t ever underestimate a first-world teenager’s capacity for tackiness. If anything, we’ll probably see a number of teens who walk around in Samsung/Beats combos switch to iPhone as soon as Apple pay that Lebron James guy enough to stop using his Galaxy phone.
Edited 2014-05-29 10:18 UTC
Fashions change. In the mid 80s Reebok went from nowhere to the top selling sports shoe brand back to nowhere in a few years.
Will anybody still be buying Beat in 2020? I doubt it.
It seems to me, that Apple paid a lot of money just to get Jimmy Lovine on board… He probably would have joined apple for $20 a week and the promise of a new iPhone5S, but he’s so good at negotiation he managed to get apple to pay him $3 billion and buy his crappy company… Just wow!
Yes, this is it. Its a Jimmy Lovine hiring by purchase. Free streaming service included at no additional cost.
This blog post (in French) is an interesting read:
http://siliconvalley.blog.lemonde.fr/2014/05/29/comprendre-lincompr…
Once upon a time half the people I would see listening to music wore white earphones.
Now around half wear red headphones.
White earphone maker buys red headphone maker.
Whats the surprise?
Spotify is eating into the iTunes $0.99 purchases, resulting in a decline of iTunes purchases. The Beats purchase was more for the Spotify ‘like’ service Beats offers. The headphones is just an added money making bonus.
I know a lot of people scoff at the Beats headphones but i see them as a gateway product for a lot of people who would have just put up with cheap headphones, beats gives them their first introduction into higher end headphones, yes they lean on bass a bit much and otherwise change the sound around, but they a million times better than the standard crap thats pumped out. Hopefully the beats headphones will get people to them try proper Sennheiser headphones.
(disclaimer i don’t own beats i just use generic Urbanears headphones)
“The new Beats headphones: now even more overpriced!”
Apple has said in the past that it is not averse to make acquisitions not related directly to it’s core services to diversify it’s assets. It has just never done that until now:
Beats offers Apple a number of things:
1 As I understand it, a very profitable P&L statement
2 A fashion brand that is growing (see also point 1)
3 A growing streaming service (Presumably with attached licenses)
As a financial investment this might be justifiable in it’s own right without any big mystery to it. All in all, it’s not that crazy.
It would be interesting to see what would happen if a bit of Apple engineering and industrial design finds its way into Beats headphones.
(On a separate note, I managed to convince my teenage son that beats were a waste of money and that he should buy a good pair of Sennheisers for much less and enjoy the music more).
Everyone rags on the quality of the headphones, but I imagine that these people just have a different taste for how their music sounds.
There was and is a huge market for speakers that emphasis bass above all else.
Beats ‘technology’ is basically nothing more than a graphics equaliser. You can do the same with any other headphones. Most mainstream companies, such as Sony, also sell bass boost headphones.
I see this as one of those moments where Apple makes it’s detractors look accurate.
The reasons Apple did this:
— get the ignorant teenagers who buy based on brand that think Apple is tired and old while Beats is fresh and new
— get the low-income people who scoff at a $99 iphone as too expensive but will buy $150 crap headphones without blinking
— get the hip-hop lovers and dance music lovers – that’s who Beats caters too, and they are becoming the majority
All three of those are marketing and brand strategies. Maybe smart business but hard to take from a company who’s engineering and product development I admire.
Other reasons they acquired Beats:
— getting Jimmy Iovine on staff — he could be one of the smarter guys left in the music business, and Apple is a major player in the music biz these days
— getting Dr. Dre on staff — also a genius businessman (make millions on NWA, find a white guy to do it again and make 10x that) and a tastemaker. to think that snoop dogg is going to be welcome on apple campus, pretty cool!
— having something, anything, to compete against Spotify.
Overall it’s just a branding/strategy/staffing sort of move, and doesn’t do much for my audio production career or my Apple appreciation career.
Not even remotely true, but, meh, Thom’s insertions are usually pretty lame.