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. "

Beats? BEATS?

[mark_reh]

Why don't they just buy iHome while they're at it? Then they'll control 90% of the iCrap market.

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.

Only in America

[Ralph Wiggam]

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

Re:I dislike Beats...

[Farmer Tim]

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

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. [fastcompany.com] (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.

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.

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...

Re:Apple has now jumped the shark

[AmiMoJo]

The climb up was under Jobs' leadership. Cook's turn at the helm seems to be the slide back down again. It's slow, but it's happening. The magic is gone, and the products are no longer technically superior to the competition.

It's already been long enough to see that. They ditched Jobs' "one true tablet size" pretty quickly. The iPhone 5/5s were both extremely "meh" and a year or two behind the competition. iOS 7 seems to have borrowed heavily from the flat look of Android and Windows, but still lacks basic stuff like widgets that make them great. Their in-car stuff is already eclipsed by MirrorLink and didn't generate much buzz when announced... Can you imagine how Jobs would have gone to town with that? Even the new Mac Pro was a bit of a damp squib once people realized that the GPUs were crippled versions of the full size cards.

Sorry, but Apple has lost it's reality distortion field generator, and the field itself is collapsing. They could still turn it around, but at the moment they are reduced to producing misleading charts [ibtimes.com] to pretend everything is going well.