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Dr. Dre, Tyrese share Heineken-fueled celebration of Apple's alleged Beats acquisition

post #1 of 174
Thread Starter 
In a video initially posted to Facebook and subsequently pulled, West Coast rappers Dr. Dre -- the cofounder of Beats Electronics -- and Tyrese appear to be celebrating the rumored sale of Dre's headphone brand to Apple, seeming to confirm that the deal is legitimate.


Dr. Dre and LeBron James wearing Beats.


Proclaiming Dre "the first billionaire in hip hop," the video was originally released on Tyrese's Facebook page, captioned thusly:

"How did I end up in the studio with Dr Dre ON THE night his deal went public that he did with Apple 3.2 BILLION!!!!! The BEATS HEADPHONES JUST CHANGED HIP HOP!!!!!!"



Word that Apple was nearing a $3.2 billion acquisition of Beats broke late Thursday afternoon. It was quickly followed by a rumor that Beats CEO and Universal Music Group chairman Jimmy Iovine was in talks to join Apple as a "special advisor" to CEO Tim Cook.

Note: The video embedded below includes profanity.



According to reports, Apple would control both the Beats headphone business and its new streaming music service. Many industry observers have expressed skepticism, however, that either of those rumors are legitimate.

Beats is not thought to have much in the way of proprietary technology, generally the driver of acquisitions for Apple. The company's streaming music rights are also unlikely to be transferable, meaning they would need to be renegotiated regardless of the deal's structure.
post #2 of 174
What clowns

What a terrible deal by Apple

Windows survivor - after a long, epic and painful struggle. Very long AAPL

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Windows survivor - after a long, epic and painful struggle. Very long AAPL

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post #3 of 174
Quote:
Originally Posted by Red Oak View Post

What clowns

What a terrible deal by Apple
Has Cook and the board lost their minds? This is really making me think hard about the Apple stock I currently hold. Don't do it Tim! 1oyvey.gif
post #4 of 174
Quote:
Originally Posted by Red Oak View Post

What clowns

What a terrible deal by Apple

Where did you read they made the deal? Link?
I’d rather have a better product than a better price.
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I’d rather have a better product than a better price.
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post #5 of 174
God help us.
 
Where's the new Apple TV?
 
And still waiting for SolipsismX to prove his accusation:
"And yet they haven't loved Google Wallet which you claimed was the exact same thing and kept posting...
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Where's the new Apple TV?
 
And still waiting for SolipsismX to prove his accusation:
"And yet they haven't loved Google Wallet which you claimed was the exact same thing and kept posting...
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post #6 of 174
This is awesome!

Some people just don't understand the kind of media connections iTunes is getting in this deal...

Jimmy Iovine is a senior executive at Vivendi Universal Music Group.
Beats investor Carlyle Group / Len Blatvatnik recently bought Warner Music Group.
Vivendi owns about 14% of Beats.

iTunes is about to become the biggest money maker for Apple.
iTunes will own the global music industry if they didn't already. 1smile.gif
Wake up people. This is huge for Apple.

As soon as Apple closes this deal and really takes it Global, it will be worth 10 times more.
Edited by AppleSauce007 - 5/9/14 at 6:23am
post #7 of 174
It is the first I'm really questioning Tim's judgement

It's hard for me to think of a worst fit in terms of company culture, product, and business strategy. It fails in all three

Windows survivor - after a long, epic and painful struggle. Very long AAPL

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Windows survivor - after a long, epic and painful struggle. Very long AAPL

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post #8 of 174
Beats does $1.5 billion a year in sales.

Beats Streaming is the best streaming app & service around.

Apple gets a successful brand name, significant cash flow, and the ability to go toe-to-toe on streaming with a superior service.

One last thing: the rumored selling price is the same amount Google spent for fricking NEST! Which do you think is a better deal and a better fit?

What's the complaining about again? 1wink.gif
post #9 of 174
Apple should really rethink this. Unless it has some out-of-the-ballpark explanation of a broad vision and strategy that goes with any such announcement. To me, this falls into the same realm as Google-Nest

Otherwise, the market is going to react quite badly to this. Not because of the amount involved (which is a rounding error), but because of what it will infer -- rightly or wrongly -- about the company's strategy (or lack of it).
post #10 of 174
I put up a poll here:

http://forums.appleinsider.com/t/179341/will-apple-buy-beat-electronics
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post #11 of 174
I'm not seeing the benefit very clearly.

Beats doesn't own patents (as far as I know). They have a brand. Their streaming business is okay, but Apple has a gargantuan business already established in that area.

Perhaps Apple wants the brand? Couldn't be profits since they're selling their gear in their store already, and the margins may not be high enough.

Perhaps it's to steal the tech away from PC and smartphone competition tie-ins? I think Apple would make more by improving the tech and leasing it. Locking it up for themselves does make a difference in profits. They're just out $3.2B

Apple's culture is heavily tied with music. I can't see what's so special about the beats brand that would motivate an acquisition when there are other brands and technology out there. Why not aquire Pandora? Also, for a couple hundred million, Apple could start it's own record label and make more profit from that.

I guess time will tell where Apple will go with this.
post #12 of 174
Quote:
Originally Posted by Carrier Wave View Post

What's the complaining about again?

Profanity for one.
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post #13 of 174

Apple may pull the contract after watching this video

bb
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bb
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post #14 of 174
Quote:
Originally Posted by Carrier Wave View Post

Beats does $1.5 billion a year in sales.

Sales and profit are different. Just ask samsung.
post #15 of 174

Why is it such a tragedy? I think Apple executive are in a better position to judge than random fans/ insignificant shareholders

post #16 of 174

I may be wrong, but I am sure that I read a review of the headphones and it said they pretty much suck. Just because they are the "in" thing doesn't mean Apple needs to buy it. 

post #17 of 174
Quote:
Originally Posted by Red Oak View Post

It's hard for me to think of a worst fit in terms of company culture, product, and business strategy. It fails in all three

 

I can't really comment on culture, as I've never worked at either Beats or Apple, but it doesn't seem such a bad fit to me.

 

In terms of product, both companies design, manufacture and distribute portable electronics. Apple has long specialised in music since the iPod, and its stores feature Beats products (headphones and speaker docks, including wireless speakers).

 

In terms of business strategy, both companies marry hardware and online music services. In Apple's case, iOS devices and iTunes, in Beats' case, headphones/speakers and online music streaming. 

 

Whilst Beats products have often been derided by the 'audiophile' community, some of us actually seek out headphones with bass heavy response. I tend to listen to electronic music over classical, and prefer the low end response of the Beats headphones, something that I've struggled to get with other brands. And I've owned a pair of Beats Tour edition in-ear buds for over three years now, which despite being tossed in a bag every day (without the case) have held up just fine, which is more than can be said for the many Sennheiser's I've replaced over the years. 

 

I guess we'll find out in early course if this deal is genuine, and how exactly Apple will benefit, but from a product and strategy standpoint the companies strike me as very similar. 

post #18 of 174
One thing I've noticed whenever entering an Apple Store. After Apple products, the most square footage is occupied by headphones. That means they sell, and Apple knows which ones sell best. Why not make all the profit, instead of being just the middle man for someone else? It also fits, as has been pointed out, with the intersection of fashion and tech ... this is where Apple excels, and something they intend to build on, with the hiring of Ahrendts.

I agree, 3.2B is a lot (and this video doesn't confirm that figure). But I'm not sure this is quite as silly as it seems. I agree the Dr. Dre phones aren't great (other Beats models are better though). But I'm sure Apple has some pretty interesting plans if they're investing these sums.
post #19 of 174
Figured this video would get some interesting comments. Seems AI wants to promote this video as reason why AAPL should not buy Beats. This is not the best video to post to show what the brand is about.

Personally, I don't think Cook should make this deal as I don't see the value for the company. AAPL can negotiate its own contracts for music streaming whenever they want they just want to bring in the music purchasing revenue as much as possible. Besides headphone tech I don't see what Beats provides. Unless they have something in the works that Cook is privvy of. Still doesn't warrant $3.2b to me.
You can't spell appeal without Apple.
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You can't spell appeal without Apple.
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post #20 of 174
Quote:
Originally Posted by PhilBoogie View Post


Profanity for one.

 

Oh please...  Grow up!  Will you?

post #21 of 174
Hmmm. Why does the tone of most of the panic stricken posts here and elsewhere on this subject remind me of the right wing's feelings about the president?
What is similar?... What could it be?
post #22 of 174
Quote:
Originally Posted by roxsocks View Post

Sales and profit are different. Just ask samsung.
I'm sure they make decent profit. Everything I've read about them indicates huge margins on the headphones. Poor sound and build quality, high price tag. Blows my mind that Apple wants to be associated with that (and Dr Dre). Way to ruin a classy brand.
post #23 of 174
Quote:
Originally Posted by massconn72 View Post
 

I may be wrong, but I am sure that I read a review of the headphones and it said they pretty much suck. Just because they are the "in" thing doesn't mean Apple needs to buy it. 

We all are acutely aware (as Apple fans) that precisely being massively popular and successful is guaranteed to draw negative commentary (click bait). While I agree that Beats aren't quite what I would choose (in the end I recently bought Bose, but only because their noise cancelling is in a league of its own, not because I love the sound), I think it's an overstatement to say they suck (I thought the Studios sounded pretty good). You can't sell that many of something that expensive for very long if you make crap. I bet the profit margins are also right in line with what Apple aims for :-)

post #24 of 174
If Apple did purchase Beats, my assumption will be because they want Beats Music for their 20 million streamable songs as well their music industry connections.
post #25 of 174
Quote:
Originally Posted by Negafox View Post

If Apple did purchase Beats, my assumption will be because they want Beats Music for their 20 million streamable songs as well their music industry connections.

The latter maybe. I doubt the license agreements transfer to Apple that easily however, and certainly, all those would require renegotiation sooner or later.

post #26 of 174
Quote:
Originally Posted by massconn72 View Post

I may be wrong, but I am sure that I read a review of the headphones and it said they pretty much suck. Just because they are the "in" thing doesn't mean Apple needs to buy it. 

They do suck. Go to any Apple store and try them on. Pitiful sound- just trendy.
 
Where's the new Apple TV?
 
And still waiting for SolipsismX to prove his accusation:
"And yet they haven't loved Google Wallet which you claimed was the exact same thing and kept posting...
Reply
 
Where's the new Apple TV?
 
And still waiting for SolipsismX to prove his accusation:
"And yet they haven't loved Google Wallet which you claimed was the exact same thing and kept posting...
Reply
post #27 of 174
Quote:
Originally Posted by AppleSauce007 View Post

Quote:
Originally Posted by PhilBoogie View Post

Profanity for one.

Oh please...  Grow up!  Will you?

I have, hence my comment. Look, I just don't think Apple is the kind of company that wants to be associated with rappers doing their 'MF' thing on camera. Does that make me childish?
I’d rather have a better product than a better price.
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I’d rather have a better product than a better price.
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post #28 of 174
Beats has been in bed with Apple since their inception, this was the plan all along. I'm just surprised it's an acquisition instead of a partnership.
post #29 of 174
I am speechless if this thing is true (and not the "good" kind of speechless).

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #30 of 174

Beats is a HUGE brand. They gross $1.5B in revenue a year.  A price of 2X revenue is cheap.  With Beats they can take iTunes to the next level and strengthen the ecosystem even more.  Spread that price tag over 30 years and you see how cheap it really is.  Beats has deep connections with the music industry.  With this one move Apple will be able to obliterate Spotify, Pandora, and any other brand in the music space. 

post #31 of 174
Quote:
Originally Posted by MattBookAir View Post

One thing I've noticed whenever entering an Apple Store. After Apple products, the most square footage is occupied by headphones. That means they sell, and Apple knows which ones sell best. Why not make all the profit, instead of being just the middle man for someone else? It also fits, as has been pointed out, with the intersection of fashion and tech ... this is where Apple excels, and something they intend to build on, with the hiring of Ahrendts.

I agree, 3.2B is a lot (and this video doesn't confirm that figure). But I'm not sure this is quite as silly as it seems. I agree the Dr. Dre phones aren't great (other Beats models are better though). But I'm sure Apple has some pretty interesting plans if they're investing these sums.

 

I agree.  And AppleSauce007 made another point that's always in my mind when it comes to acquisitions with his comment, "As soon as Apple closes this deal and really takes it Global, it will be worth 10 times more."  A lot of folks look only at the existing value of a business.  But smart acquisitions are smart because there's often a multiplier effect when a small company is purchased by a much larger company, with much larger resources.  Apple can bring economies of scale to manufacturing costs, make adjustments to the sound of the headphones and earbuds to serve both the Beats philosophy and the Apple philosophy of acoustic representation, with different representations for different market segments (they can do both).  And Apple can put additional marketing muscle and visibility behind the brand, beyond what's already there (which is already pretty huge).   

 

Then there's the music streaming side, which Beats can assist Apple in evolving.  Still early days here for all companies involved and Apple has the best shot with its huge size and existing presence. 

 

And then theres the talent acquisition.  Part of this is a defensive move to keep that talent from being taken elsewhere.

 

Finally, Tim Cook is unlikely to make a bad move here.  If apple buys Beats, it's because there's good reason to do so and its a stretch to suggest Tim Cook and Apple aren't on top of this area of their business and able to make smart decisions.

I don't care about what the ignorant masses perceive as truth. I'm concerned with the facts on the ground.
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I don't care about what the ignorant masses perceive as truth. I'm concerned with the facts on the ground.
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post #32 of 174

I'm sure the margins on the headphones are huge considering speaker tech hasn't majorly leaped over decades. 

 

However, I'm skeptical of this like most here...


Honestly, i'd rather see them buy Tesla if I were to concoct a *crazy* acquisition for Apple.

post #33 of 174
Quote:
Originally Posted by allmypeople View Post
 

I'm sure the margins on the headphones are huge considering speaker tech hasn't majorly leaped over decades. 

 

However, I'm skeptical of this like most here...


Honestly, i'd rather see them buy Tesla if I were to concoct a *crazy* acquisition for Apple.

 

Tesla makes ZERO money.

 

They would go bankrupt if it wasn't for GOVERNMENT WELFARE checks.

post #34 of 174
Apple's flash was always backed up by substance. Beats flash is only flash. If it happens, what a mistake.

If you want headphones, but Jerry Harvey Audio.

Beats look good, but sound poor.

(A proud owner of JH16's, and other various Westone, Ultimate Ears & Earsonics products)
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post #35 of 174
Quote:
Originally Posted by sog35 View Post

I think many of your are just prejudice of black people.

Sorry, I had to say it.

Beats is a HUGE brand.  Most of you are too old or too out of it to understand.

They gross $1.5B in revenue a year.  A price of 2X revenue is cheap.  With Beats they can take iTunes to the next level and strengthen the ecosystem even more.  Spread that price tag over 30 years and you see how cheap it really is.  Beats has deep connections with the music industry.  With this one move Apple will be able to obliterate Spotify, Pandora, and any other brand in the music space. 
it might be a huge brand but there is nothing classy about it. And a lot of people considerate overpriced junk. Why would Apple want to be associated with that?
post #36 of 174
Quote:
Originally Posted by sog35 View Post
 

 

Tesla makes ZERO money.

 

They would go bankrupt if it wasn't for GOVERNMENT WELFARE checks.

lol. I like how I mentioned that it was a crazy acquisition and that somehow baited you to comment something useless...

 

You do realize they paid back the government loan WITH interest EARLY, right? Also, I assume you don't claim any "government welfare" credits writing down your income, right? lol. Want to elaborate on the U.S. national security relating to fossil fuels and why a company like Tesla, according to you, is a step in the wrong direction? 

post #37 of 174
Quote:
Originally Posted by sog35 View Post

Tesla makes ZERO money.

They would go bankrupt if it wasn't for GOVERNMENT WELFARE checks.

You are completely off base with both of those comments. Tesla makes a profit, they paid their government loan off in record time, and welfare checks have absolutely nothing to do with tesla owners. Beats owners, maybe, but tesla owners no.

As for beats being classy; they certainly are classier than Samsung. Just because most of the naysayers here don't understand them doesn't mean they are an illegitimate brand. They are doing something right to earn $1.5 billion/year. Every athlete and celebrity wears beats. They have turned the noticeable Apple white headphone look into something even more noticeable. They clearly know how to market their brand. Combine that with the music industry connections, and I'm a fan of this rumor.
post #38 of 174
Hello to all,

My take on this is, they are targeting the urban communities which believe it or not is the larger market for headphones specifically these headphones.

I'm in NYC and if you walk throughout the entire city all you see are Bose and beats headphones.

It's rare when you see people with the white buds here anymore. And please keep in mind also, the are also getting the beats pill and all of their other Bluetooth devices which do sound well, it is a great market and it shows that apple is open minded to the non-rich and non-upper middle class.

The demographics clearly show who spends the money in this market and who spends the most money for these products.

Also, the urban youth hardly ever use warranties, what does that mean? It means they would rather buy then to use the warranty.
post #39 of 174

Apple......stayin classy :no:

Help! I'm trapped in a white dungeon of amazing precision and impeccable tolerances!

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Help! I'm trapped in a white dungeon of amazing precision and impeccable tolerances!

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post #40 of 174
Quote:
Originally Posted by sog35 View Post

I think many of your are just prejudice of black people.

Sorry, I had to say it.

Beats is a HUGE brand.  Most of you are too old or too out of it to understand.

As a middle aged white guy who proudly voted for Obama twice, I have to say that your statement is the biggest pile of steaming horse manure I have come across in years. Beats are a poor excuse for a headphone. EVERY MODEL can be beaten on a sound quality basis for a third of the money. That is the ONLY reason behind my belief that this is an absurd acquisition. Beats us a horrible value for the money. My disdain in solely based on quality. If you want to bring race into this, the only thing I see is another version of black on black crime.
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