Apple Confirms Purchase of Beats For $3 Billion

SimonTheSoundMan writes: "Apple has confirmed it will buy Beats Electronics and Beats Music for $3 billion. Apple will make the purchase using $2.6 billion in cash and $400 million in stock. An important part of the acquisition for Apple is absorbing the Beats subscription streaming service, even though it only has about 110k users. The Beats brand will remain intact, and will continue to sell headphones. "

Comments

I dislike Beats...

[AcquaCow]

...but I appreciate what their marketing team has done for the rest of the headphone industry...

Re:I dislike Beats...

[Farmer Tim]

I think he means they make any other headphones look like high quality bargains by comparison.

Re:I dislike Beats...

[scubamage]

They're really not that great. They're built for a single type of music (things that go thump). Try listening to something like an Opera or a Symphony and they'll quickly fall to shambles. They're unbalanced, there's no definition of sound, the soundstage is only decent on the low end, the frequency response is worse than you can find on most earbuds... they're pretty bad. And they're overpriced.

Style over substance

[AmiMoJo]

I think it's safe to assume Apple wanted the Beats brand and styling, since the technology is nothing special. Beats headphones sound shit compared to much cheaper competitors, so apparently the logo is worth billions.

We seem to be in another bubble, where brand popularity is valued way too high.

Re:Style over substance

[NoKaOi]

so apparently the logo is worth billions

Well, isn't that the case with just about everything? Branding & perception. Ask your average purchaser what they think of Beats headphones and most of them will tell you they sound amazing and are totally worth the price. It's like Coke vs. Safeway Select cola. They taste exactly the same (not all brands taste the same, but in that particular case they do), but the store brand is 1/4 the price. Yet plenty of people still buy Coke when the store brand version is sitting in the same aisle. Now think of brand names in just about anything. What makes Beats any different? Do you seriously think quality matters more than branding perception to most consumers?

And you're ignoring this part:

An important part of the acquisition for Apple is absorbing the Beats subscription streaming service

Not just the service, but more likely the licensing agreements.

Re:Style over substance

[nblender]

I hadn't heard of Beats until last week. I was in a Future Shop (like Best Buy) with my son and he was all gaga over some of these Beats headphones on display... So I put them on and listened. It was like I was listening to music through a tin can while someone tapped on the can with a pencil... I'm far from a 'golden ear' audiophile wanker... I have a pair of mid-low end Sennheisers on my head 8 hours a day at work...

Re:Style over substance

[mythosaz]

Sure. There's no questioning that, say, fountain Coke varies from location to location - McDonald's uses RO water, generally the same equipment, and a Coke there tastes different (and to me, better) than a fountain Coke at Burger King -- which purifies its water, but not RO. Also, apparently, a larger quantity of the water is kept chilled in their RO system (keeping it colder, allowing for better CO2 absorption).

[A quick "McDonalds reverse osmosis" search shows a few articles that all say the same thing.]

You can generally get a good Coke at your local Water and Ice store for similar reasons.

Anyone living near Mexico can also tell the difference between a glass bottled Mexican Coke and the US version because of the sugar used.
http://en.wikipedia.org/wiki/M...
It used to be a treat at "real' Mexican restaurants here in the Southwest, but now they're available at Costco.
[I personally avoid most sugared drinks, but indulge in the occasional "MexiCoke."]

Regardless, Safeway Select Cola is in no way "exactly the same" as Coke :)

Re:Style over substance

[umdesch4]

I'm surprised you're being modded flamebait. My first listen to the $299 version of Beats, I was certain they were actually broken. But no, I tried them at 3 different stores, and I can't for the life of my understand how they just don't sound downright bad to other people. They sound broken to me. The bass is cranked, but only in a very narrow range that makes certain notes in a bassline sound louder than others, and there's some weird kind of thing going on in the midrange that almost sounds like phase cancellation. I dunno man...

At last Dre has enough money to go back to school

[Kenja]

Now he can finish his Doctorate and stop living a lie!

Buying a streaming contract?

[kinarduk]

I know apple have tried hard to get the labels to sign up to a music streaming service. Perhaps they bought beats because it already had a contract in place with the major labels, thus removing all of the complicated negotiations?

Only in America

[Ralph Wiggam]

The DJ responsible for "Fuck Tha Police" just made a billion dollars. I love it.

Re:Apple has now jumped the shark

[Charliemopps]

Hype.

Apple used to be good at making it.
Then Jobs died.
Now they have to buy it.

Re:Beats Streaming Service has 110K Users?

[R3d M3rcury]

Actually, a co-worker brought up a good point.

Apple had to go begging and pleading to the music labels to get permission to stream music and they probably got reamed. Supposedly, Beats Music has a kick-ass licensing deal with the labels--better than Spotify and Pandora. So now that's Apple's deal.

Re:Apple has now jumped the shark

[sootman]

Wow. A 15-year climb from bankruptcy to the most valuable company in the world and people still look at every single move Apple makes and say "wow, that's fucking dumb." Isn't it just remotely possible that Tim Cook knows what the fuck he's doing, and that there's a good reason for buying Beats? How 'bout we give it a few weeks, huh? Maybe, just maybe, the guy running Apple knows something you don't, and perhaps we should give him the benefit of the doubt just this once and see how this plays out before passing judgement?

Sorry, I must be new here.

Besides: every move Apple makes doesn't have to be some earth-shaking road to an innovation unseen since the last amazing thing they did (which everyone shit all over at the time anyway.) If Apple buys Beats or Pepsi or Whirlpool or Nabisco or whoever for $3 billion and they make more than $3 billion off of that in the near future, then it was a good investment, right? Do you know what would make Beats worth $3 billion today? IF IT EARNS $5 BILLION IN THE NEXT FIVE YEARS. And oh, look, that's probably what will happen. (And note that Tim Cook probably has better financial info available than a year-old Fast Company article.) Maybe Tim looked at Dre's books and decided that with Apple's awesome buying power and manufacturing prowess that they could DOUBLE the profit of Beats OVERNIGHT. They might earn that money back by next Christmas.

Only 110K people who have figured out how to...

[anyaristow]

...sign up.

I tried to sign up for the streaming service today. I pressed the prominent "free trial" button, read the terms of service and privacy policy, and filled out the web form, only to be told "username not reserved." WTF does that mean? Temporary trouble? Hit the sign up button again...username not reserved. Picked a different user name. "Email not reserved."

So, I read some of their support forum, where other people are asking, "wtf is username not reserved", and found you had to sign up through their mobile app before you can sign up for the free trial on their website.

I checked again and found no instructions to that effect.

Maybe there are only 110K people who have figured out how to sign up.