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. "

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.

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?

Re:Style over substance

[jbolden]

I don't know about that. Beats has something like 2/3rds of the headphone industry selling $50 headphones for $200. Beats probably does about $1b in 2014 in sales. I'm hard pressed to see how that brand isn't easily worth $2b and for a control investor a like Apple who could leverage beats to also sell phones... I don't see the bubble.

I'll agree the technology is worth $0.