May 09, 2014

What does the acquisition of Beats mean for Apple?

I was a little surprised to learn that Apple is purchasing Beats in a $3.2 billion deal. What does Apple really get out of this - more overpriced products that put a premium on styling but offer little more than more reasonably priced competition does in terms of performance? I mean, really, don’t they already have that covered? Other than ensuring that I am going to see lots of Beats wearing iPad users at the local coffee shop, what does Apple get out of this deal that could possibly make it worth $3.2 billion?

I agree that the streaming music service seems to be what Apple wants. The rest of it doesn't make much sense for Apple, unless they know something about it that we don't. I imagine we'll find out as the acquisition is completed.

You are looking at the wrong part of Beats. I don’t think Apples cares much about the headphones; Apple cares about Beats streaming music service. And, if I were a betting man, I’d wager than the quality of Beats headphones is going to get a lot better with Apple in control. Also, as pointed out in a Salon article, Apple is able charge premium prices because their products are perceived as “cool.” I’m a bit too old for Beats headphones...or maybe not, since I’m the same age as Dr. Dre, but if you look at college age and younger kids today, you will see a lot of them with Beats. Whether you or I think so, Beats are cool to them and Apple wanted a piece of that cool pie. 

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