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Apple to reportedly announce Beats deal this week at lower $3 billion price - Page 3

post #81 of 99
Quote:
Originally Posted by PatchyThePirate View Post


Well, not all..
This fool, along with many other trolls, jumped on the fact that there are some legitimate doubts about this deal to endlessly, and prematurely criticize Tim and Apple. BTW, how did the term "haters" come into popular use? 1wink.gif

Anyway, amongst the legitimate questions posed, most of the opposition to this deal has been little more than foot stamping. After the initial shock of the deal, buying Beats makes a lot of sense. For one, Apple has given no indications that it makes bad acquisitions, but for the doubting Thomas's out there:

1) There is very little financial risk, with $1.3B and growing revenue in 2013, Ireland tax breaks, and now the price is reduced by $0.2B.

2) Dealing with musicians is not in Apple's core competency. The potential for an iTunes music label is huge; the popularity and growth of iTunes festival is the tip of the iceberg. Even the threat of a label can give Apple huge leverage on negotiations with labels, particularly if Apple is trying to get a streaming service off the ground.

3) Curation and music AI. Curation is also not a core Apple competency, as can be seen with the stale state of iTunes, a huge inconsistency for a company that is so amazing at intersecting humanities with technology in consumer electronics. It seems Beats has a great creative team of over 150 people in charge of Beats Music, led by Iovine, Dre, and Trent Reznor. Algorithms are not enough, just like with Siri, the key is to combine algorithms and human curation.

4) There is a lot of appeal to Beats headphones, which are reportedly attuned to mimicking the experience of live music, not perfectly accurate music reproduction (as Dick Applebaum discussed in a previous thread). This is the experience that the majority of consumers are looking for.

Apple should strive to be the clear leader in music. More and more music is being commoditized and consumed for free, the trend is clear. Radio apps, soundcloud, and youtube are providing viable alternatives to buying music. Apple should do more than just present songs in iTunes as a utility. Music curation allows Apple to provide compelling value over algorithms and free streaming. Apple is once again in the position to save the music industry from itself.

That is a good point. However, google and spotify pay out royalties. However, having iTunes sponsored albums or Beats music label or something sounds interesting. I don't quite understand the logic here but you make some very good points. Apple's core competency isn't within the music/entertainment industry itself.

post #82 of 99
Quote:
Originally Posted by Andysol View Post



Guessing neither of you have ever bought a company- Revenue means little when you look at buying a business or determining a value. Ebitda and synergies do. There are essentially no synergies, and If their revenue is 1.3bil and they profit 130 mil, it's not a good deal. Of course- We don't know their profit as they're a private company. We don't have the numbers, so we can't determine a valuation.

As a side note- I will gladly sell my company for 230% of gross revenue. You bring the check, I'll bring the keys!

 

Beats is a high margin business.  The estimates for profit are $300M to $400M.

 

Its hilarious that a small scrub like you think you know more about acquisitions than the most valuable company in the entire world.  Stop being a pig-headed fool and admit your business knowledge is far below Mr Cook.

 

Sorry don't even compare your Lawn Mowing business to the top-end Beats company.  Your business is ULTRA low margin.  Beats is HIGH END.  They dominate the high end headphone business and have extremely nice margins.

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post #83 of 99
Quote:
Originally Posted by sog35 View Post
 

Great news.

 

Beats already has $1.3 Billion in sales a year and GROWING.

 

The price was only 230% of yearly sales.  That's an outstanding price for a growing company.

 

Problem is the people in this forum have no VISION and don't understand how powerful a brand Beats is in the urban culture. 


So do you think Apple will maintain the Beats brand? If not, then all the power of the brand is worthless. If they do, then that would be very out of the norm for Apple (the only similar thing I can think of is Filemaker, and that did not turn out too well for them) and considering Apple is already making billions a year, would b strange to see them acquire a company for its profits.

 

The whole acquisition makes very little sense to me. The only way it works, IMO, is if the music rights are transferable. If not, the acquisition actually destroys value, as far as I can tell, by causing the forfeiture of the music rights.

post #84 of 99
Quote:
Originally Posted by addicted44 View Post
 


So do you think Apple will maintain the Beats brand? If not, then all the power of the brand is worthless. If they do, then that would be very out of the norm for Apple (the only similar thing I can think of is Filemaker, and that did not turn out too well for them) and considering Apple is already making billions a year, would b strange to see them acquire a company for its profits.

 

The whole acquisition makes very little sense to me. The only way it works, IMO, is if the music rights are transferable. If not, the acquisition actually destroys value, as far as I can tell, by causing the forfeiture of the music rights.

 

Apple is Doomed buying a company that actually makes a profit (300-400 million on 1.4 billion in revenue), the streaming software MOG/Beats music works better than the streaming radio software added on to iTunes in recent times. The design, marketing, and performance of Beats headphones is ahead of the competition in their market with over 50% marketshare, yes Apple is Doomed how dare they buy a profitable company. At 2x earnings.

 

Long AKG K240 DF (less bass)  Sony MDR V-900 (more bass)

post #85 of 99
Quote:
Originally Posted by addicted44 View Post
 


So do you think Apple will maintain the Beats brand? If not, then all the power of the brand is worthless. If they do, then that would be very out of the norm for Apple (the only similar thing I can think of is Filemaker, and that did not turn out too well for them) and considering Apple is already making billions a year, would b strange to see them acquire a company for its profits.

 

The whole acquisition makes very little sense to me. The only way it works, IMO, is if the music rights are transferable. If not, the acquisition actually destroys value, as far as I can tell, by causing the forfeiture of the music rights.

 

Who knows?  With the possibility of Apple joining the home automation space they may getting into more home electronics like Speakers, TV's, lights, ect.

 

So the acquisition makes little sense to you?  Do you know Apple's road map for the next 5 years?  Next year? Next 6 months?  Of course not.  That being the case just sit the hell down and let the professionals take over.

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post #86 of 99
Quote:
Originally Posted by sog35 View Post
 

Who knows?  With the possibility of Apple joining the home automation space they may getting into more home electronics like Speakers, TV's, lights, ect.

 

So the acquisition makes little sense to you?  Do you know Apple's road map for the next 5 years?  Next year? Next 6 months?  Of course not.  That being the case just sit the hell down and let the professionals take over.

 

It's always surprising to see how many people at AI know Apple better then Apple knows Apple.  ;)

post #87 of 99
Quote:
Originally Posted by DroidFTW View Post
 

 

It's always surprising to see how many people at AI know Apple better then Apple knows Apple.  ;)

 

... on both sides of the coin.

 

But, this is a speculation/rumor site. I see nothing wrong at all with people giving their opinions. Sometimes they're wrong but sometimes they end up being right.

Hmmmmmm...
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Hmmmmmm...
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post #88 of 99
This is Time Warner buying AOL all over again. Good luck Apple with your trendy overpriced purchase. You've been had.
 
Where's the new Apple TV?
 
 
(So Y is the new X?   Zzzzzzzzzz......)
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Where's the new Apple TV?
 
 
(So Y is the new X?   Zzzzzzzzzz......)
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post #89 of 99
Quote:
Originally Posted by pazuzu View Post

This is Time Warner buying AOL all over again. Good luck Apple with your trendy overpriced purchase. You've been had.

 

$165B deal vs a $3B deal.

 

The amount of idiocy here is amazing.

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post #90 of 99
Originally Posted by sog35 View Post

$165B deal vs a $3B deal. The amount of idiocy here is amazing.

 

What about considering scale?

post #91 of 99
Click bait. If this deal is true id expect a WWDC announcement
post #92 of 99
Quote:
Originally Posted by sog35 View Post
 

 

Beats is a high margin business.  The estimates for profit are $300M to $400M.

Estimated profits based on what?  They're a private company who hasn't ever made their books public.  It's all a big wild guess.

 
 Its hilarious that a small scrub like you think you know more about acquisitions than the most valuable company in the entire world.  Stop being a pig-headed fool and admit your business knowledge is far below Mr Cook.

Its hilarious that a small scrub like you think you know as much about acquisitions as the most valuable company in the entire world.  Stop being a pig-headed fool and admit your business knowledge is far below Mr Cook.

 

Correct me if I'm wrong- did Apple buy Beats?  Did we hear an announcement?  Do we know what Beat's profit margins actually are?  All I was saying is that no one determines the valuation of a company based on gross revenue.  No one.  Yet you said:

Quote:
Originally Posted by sog35 View Post
 

The price was only 230% of yearly sales.  That's an outstanding price for a growing company.

Proving you have no clue on how to value a business.

 

Quote:

Sorry don't even compare your Lawn Mowing business to the top-end Beats company.  Your business is ULTRA low margin.  Beats is HIGH END.  They dominate the high end headphone business and have extremely nice margins.

So I take that as a "no"- you've never bought a profitable business before.  I'm in the wastewater/environmental testing industry- not a lawn mowing business- although landscaping has outrageous margins and is very lucrative- but I digress.  You have no concept of what my margins are- ironically enough- you have no concept what beats margins are either.  Hence- you have no idea what beats should be valued at.  If they have phenomenal margins- great.  But there is no synergies in that business to warrant a purchase.  Nothing outside of a small music streamer, some studio deals (which don't transfer with a purchase- so pointless) and dre/iovine's "clout" in the industry (as if Apple didn't have enough!)  So essentially they are buying a profitable hardware company.

 

This deal ain't gonna happen and it's more click-bait- I'm convinced.  Unless there is something behind the scenes that none of us are privy to, I just don't see it...


Edited by Andysol - 5/28/14 at 1:09pm

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post #93 of 99
Quote:
Originally Posted by Andysol View Post
 

Estimated profits based on what?  They're a private company who hasn't ever made their books public.  It's all a big wild guess.

Its hilarious that a small scrub like you think you know as much about acquisitions as the most valuable company in the entire world.  Stop being a pig-headed fool and admit your business knowledge is far below Mr Cook.

 

Correct me if I'm wrong- did Apple buy Beats?  Did we hear an announcement?  Do we know what Beat's profit margins actually are?  All I was saying is that no one determines the valuation of a company based on gross revenue.  No one.  Yet you said:

Proving you have no clue on how to value a business.

 

 

So I take that as a "no"- you've never bought a profitable business before.  I'm in the wastewater/environmental testing industry- not a lawn mowing business- although landscaping has outrageous margins and is very lucrative- but I digress.  You have no concept of what my margins are- ironically enough- you have no concept what beats margins are either.  Hence- you have no idea what beats should be valued at.  If they have phenomenal margins- great.  But there is no synergies in that business to warrant a purchase.  Nothing outside of a small music streamer, some studio deals (which don't transfer with a purchase- so pointless) and dre/iovine's "clout" in the industry (as if Apple didn't have enough!)  So essentially they are buying a profitable hardware company.

 

This deal ain't gonna happen and it's more click-bait- I'm convinced.  Unless there is something behind the scenes that none of us are privy to, I just don't see it...

 

Beats sells plastic headphones for $500.  Its a pretty safe bet their margins are quite healthy.

 

Again it comes down to this:

 

Should I believe a random guy on the internet who knows NOTHING about Apples 5 year road map?

Or should I trust the most valuable company in the entire world?

 

Sorry I'm going to trust Apple that they know what they are doing.

 

LOL, at you comparing Beats to an industrial waste company.  Made me laugh hard.

 

Again leave it to the professionals.  Sit your azz down and let it play out.

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post #94 of 99
Quote:
Originally Posted by Andysol View Post

 

 

This deal ain't gonna happen and it's more click-bait- I'm convinced.  Unless there is something behind the scenes that none of us are privy to, I just don't see it...

 

Deal is official. News just out.

 

Again proving you know NOTHING about Apple's business.

Now just sit down and let the professionals do their thing.

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post #95 of 99
Quote:
Originally Posted by sog35 View Post

Deal is official. News just out.

Again proving you know NOTHING about Apple's business.
Now just sit down and let the professionals do their thing.

The "professional" CEO in this case is clearly floundering. No idea what he is doing.
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post #96 of 99
Quote:
Originally Posted by sog35 View Post
 

 

Beats sells plastic headphones for $500.  Its a pretty safe bet their margins are quite healthy.

 

Again it comes down to this:

 

Should I believe a random guy on the internet who knows NOTHING about Apples 5 year road map?

Or should I trust the most valuable company in the entire world?

 

Sorry I'm going to trust Apple that they know what they are doing.

 

LOL, at you comparing Beats to an industrial waste company.  Made me laugh hard.

 

Again leave it to the professionals.  Sit your azz down and let it play out.

Are you listening to yourself and me?  I'm in agreement with you- neither of us knew enough about Beats to know if it's a good purchase or not because we aren't privy to all the information and financials.  I trust Apple to determine if it's a good deal or not- aka "leave it to the professionals".

 

Now that that's settled- lets go back to my original (and only) point:

I said you are wrong in determining the value of a company based on gross revenue- that's just idiotic.  Something you still haven't tried to rationalize.  You just throw up these fake arguments.  But whatever- it's done. 

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post #97 of 99
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Originally Posted by sog35 View Post

Beats sells plastic headphones for $500.  Its a pretty safe bet their margins are quite healthy.

The selling price in no way indicates what the margin is.

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post #98 of 99
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Originally Posted by SolipsismX View Post


The selling price in no way indicates what the margin is.

 

This is true. Apple may be able to re-engineer for better quality and negotiate for better pricing with manufacturers in China.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #99 of 99
Quote:
Originally Posted by SolipsismX View Post

The selling price in no way indicates what the margin is.

Exactly right. In the indentical way that gross revenue doesn't determine the value of a company. Not sure why he wanted to argue about that and turn it into a "Andysol thinks he knows more than Tim Cook and Apple"- which is incorrect and I never said.

Not sure why I allow myself to be annoyed by faceless beings on the other end of a keyboard. I'll need to work on that 1tongue.gif

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