Originally Posted by williamlondon
Originally Posted by Dick Applebaum
Here:http://www.asymco.com/2014/02/10/fortune-130/And, here:http://www.asymco.com/2014/05/09/measuring-not-getting-the-cloud/#disqus_threadLook at these and note what is happening toApple's content and services business categories. Especialy what is happening withMusicvis a visServices.
IMO. Apple understands that they need to do something to offset the decline in music revenues. I suspect, they think the Beats Streaming Service will goose the music revenues -- and is exactly what Apple needs for the next 5 years (or so).
Even to a company the size of the Fortune 130, the acquisition price is a reasonable amount.
If I'm understanding you correctly then I completely disagree with your conclusion. iTunes, the App Store, iCloud, while they may make money for the company, their number one reason is to support and make more valuable Apple Hardware.
What you say was true for much of the last decade, but times are changing -- at least for Apple's music
content and music
If Apple hardware didn't exist, none of those entities would either. There is no reason to possess a streaming music service for a company like Apple without hardware to which in can be streamed, so buying something as a revenue source that exists in a more agnostic device world doesn't make any sense - it's not a reason to buy this.
One of Apple's biggest assets is its customers -- customers that have
money and are willing
to spend it.
While the number of Apple customers is increasing, they are spending less money on music
Where are those Apple customers spending their music
If those Apple customers are looking elsewhere for their music
-- might they look elsewhere for other purchases?
It's not Apple, and if it happens it would signal a HUGE shift in how Apple views its portfolio, and events like that, although they sound easy on paper, almost never ever happen in the business world - it's one reason companies die, because they can't change who they are.
What do you mean: "it's not Apple ... it would signal a HUGE shift in how Apple views its portfolio"?
What you do you think happened when Apple introduced the iPod -- then [bought and] released iTunes -- for Macs? For Windows?
What do you think happened when Apple introduced the iPhone and the iPad?
What, do you think happened when Apple changed its name from Apple Computer to Apple?
I'll tell you why -- technology, times and tastes were changing -- and Apple was observant and prescient enough to go boldly (commit the company) where none had gone before!
I submit that each of the above changes
were a bigger risk to Apple, when they occurred -- than spending ~ 2% of their cash on the Beats acquisition.
In my opinion Apple isn't about to place a new and big focus on non-hardware services as revenue streams. The non-hardware services can make money (and most if not all of Apple's do), but that's not the reason they exist and I don't see that changing.
I totally disagree!
And, I think Apple has already shown us how they will do it.
Announce iBeats as a $100/year service bundled with the paid iCloud service -- available to all comers.
First time purchasers of an iWatch [sic], Mac, AppleTV, iPhone, iPad, iPod -- will get the service free, for 1 Year.
Existing Apple customers will get the service at 50% off for 1 year.
Existing iCloud customers will get their subscription extended through some acceptable means.
Have special promos for iCloud/iBeats services as the opportunities warrant!
Where do you think current and former Apple music
customers will get their music
a year from now?
Do you think the added value of iBeats/iCloud might just influence a potential customer to choose Apple hardware and services over a competitor?
See how that works?
Happy, now?Edited by Dick Applebaum - 5/12/14 at 10:07am