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Wall Street warming up to $3B Apple-Beats deal, sees potential to offset declining iTunes revenue - Page 2

post #41 of 97
Quote:
Originally Posted by ascii View Post
 

But Beats was already in the ecosystem before the acquisition (through their app).

 

I guess it depends what your ultimate corporate goals are. Do you want to spread certain products, with a certain design, or do you just want to get bigger and bigger even if it's selling other people's stuff. I believe Elon Musk has said he will sell Tesla once electric cars reach a certain critical mass, which is an example of the first kind of philosophy, as against the beats acquisition which is just about maintaining a position in a certain market regardless of whether it actually makes your own products better. 

No, it wasn't. NOW it is. Though there may have to be continuing licensing deals, Apple's new subscription service could ultimately include its entire music library. I see the acquisition as a very savvy marketing move. The subscription service will not only reach more people, artists may see the opportunities, too and get on board the new train.

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post #42 of 97
Quote:
Originally Posted by anantksundaram View Post
 

It's more likely that you (and the other tiresome naysayers here) refuse to understand because you don't agree.

 

The overwhelming reaction from analysts, financial media, financial commentators, and talking heads to the deal when it was first announced (as a rumor by the Financial Times) was negative. (For the record, I was quite negative about it too -- you're welcome to go back and check my posts.) Apple's stock price fell by much more than the market's did when this rumor came out.

 

Look at the reaction of both the analysts and the market today.

 

I think you guys are totally blinded by your hissy-fits.

 

Just a side note...

 

Just because you and the analysts are warming to the deal doesn't mean that it is a good deal. Only time will tell that.

 

This is a site for opinions. It's more likely that you refuse to understand because you don't agree. 

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post #43 of 97
Quote:
Originally Posted by kfeltenberger View Post

I think this will be a good long term acquisition because I don't just see this as an acquisition of a music streaming service, a couple of faces with credibility and contacts in the industry, or a ploy to build an image among the black community, but rather I think that the production potential is enormous.  Apple has already launched A-list performers' albums exclusively on iTunes and iTunes has given a tremendous amount of smaller, independent performers a venue to market their music.  Why not take it to the next logical level; groom and produce this new talent and sign them to an iTunes or Beats label?  This would allow Apple to cut out the middle man (the record company) and offer more royalties to the performer and at the same time pocket their 30% plus a bit more.

Very interesting idea. Maybe the whole idea behind this.
post #44 of 97
Quote:
Originally Posted by anantksundaram View Post

It's more likely that you (and the other tiresome naysayers here) refuse to understand because you don't agree.

The overwhelming reaction from analysts, financial media, financial commentators, and talking heads to the deal when it was first announced (as a rumor by the Financial Times) was negative. (For the record, I was quite negative about it too -- you're welcome to go back and check my posts.) Apple's stock price fell by much more than the market's did when this rumor came out.

Look at the reaction of both the analysts and the market today.

I think you guys are totally blinded by your hissy-fits.

Nonsense. The "hissy fits" are grounded in reality. Apple's history up to now has not been about chasing marketshare and protecting old ground, it has been about "skating to where the puck WILL be". The Beats deal is "sitting on the puck."

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post #45 of 97

You know, with the Ahrends hire and now the Iovine/Dre acquisition, I think what Cook is really doing is assembling an all-star management team (and one which is not going to try to topple him, in the post-Jobs time, like some previous team members).

 

And that's what I think is perhaps the most important Jobs-ian wisdom that Cook learned. Cook's a supply-line guy, and a good one. But he doesn't have Steve's RDF - no one does, and he'd be a fool to try to fill those shoes. What he can do is what Jobs did, which is put together the best talent he can find/hire/buy.

 

Sometimes, all-star casts fall flat - the one that comes to mind is the movie "It's a mad, mad, mad, mad world", which packed in every well-known comedian of the day, and somehow wasn't funny - but with that caveat in mind, as an Apple fan and stockholder, I like what I see.

post #46 of 97
Quote:
Originally Posted by anantksundaram View Post

What "image" does Apple currently have among the "black community"? What exactly does Apple need to "build"?

It's not clear what you're getting at. Are you some type of sociologist of the "black community"?

I think you misunderstood him. He was making his point in opposition to this statement you lifted out of context.
post #47 of 97
Quote:
Originally Posted by SpamSandwich View Post

Nonsense. The "hissy fits" are grounded in reality. Apple's history up to now has not been about chasing marketshare and protecting old ground, it has been about "skating to where the puck WILL be". The Beats deal is "sitting on the puck."

Not really. You're missing the point. It's about defending its leadership in existing turf (iTunes and music), turf that is a hugely important part of Apple's ecosystem, and one that made the iPod, iPhone, and iPad so successful in the first place.

 

If iTunes is slowing, Apple has to figure out a way to rejuvenate it to make it grow. There are only two options to do so: do it organically (R&D, or research and development), or inorganically (A&D, or acquisition and development). The latter approach is what, for example, made iTunes and Siri possible.

 

If it's the latter, the only relevant questions become: (i) Did Apple acquire at a reasonable price? and (ii) Will the acquisition help rejuvenate iTunes?

 

On (i), I am absolutely convinced -- subject to very sketchy data, although Apple will have had access to tons of it from its due diligence -- that $3B is a reasonable price, just for the Beats headphones piece of it. If there's not a fit there, I'll bet (and someone else mentioned this as well) Apple can sell it for at least that much (+ time value of money). On (ii), I am inclined to cut some slack to Apple's management, since more than anything else, Apple seems to have been unable to rejuvenate iTunes organically (I'd add AppleTV interface and software to that list).

post #48 of 97
Quote:
Originally Posted by Flaneur View Post

Finally, reason has returned. You could have saved everybody a lot of time by thinking (instead of reacting) from the beginning. Congratulations.

"Cheaper sub-brand" still reeks of your class-based prissiness, though. And we don't "use" Beats. We are fortunate to have Apple management that knows a wave to surf when it sees one.
What are you talking about? Lots of companies have cheaper sub brands. Gap has Old Navy. Ralph Lauren has Chaps. J Crew is creating a less expensive brand. Look at the auto industry where you have luxury brands like Lexus and their less expensive counterpart Toyota. The more I think about it the more I think it makes sense for Apple to utilize the Beats brand as a way to go downmarket. Or at least be something completely different from the Apple brand. Utilizing Beats to create a fun/colorful and perhaps less expensive line of products isn't being prissy. Of course I have no idea if this is in Apple's plans. The press release de-emphasized the hardware business and Cook did shove it under Schiller and not Ive or Riccio. So maybe Apple is planning to leave it as is and just reap the profits of the existing brand.
post #49 of 97
Quote:
Originally Posted by anantksundaram View Post

Not really. You're missing the point. It's about defending its leadership in existing turf (iTunes and music), turf that is a hugely important part of Apple's ecosystem, and one that made the iPod, iPhone, and iPad so successful in the first place.

If iTunes is slowing, Apple has to figure out a way to rejuvenate it to make it grow. There are only two options to do so: do it organically (R&D, or research and development), or inorganically (A&D, or acquisition and development). The latter approach is what, for example, made iTunes and Siri possible.

If it's the latter, the only relevant questions become: (i) Did Apple acquire at a reasonable price? and (ii) Will the acquisition help rejuvenate iTunes?

On (i), I am absolutely convinced -- subject to very sketchy data, although Apple will have had access to tons of it from its due diligence -- that $3B is a reasonable price, just for the Beats headphones piece of it. If there's not a fit there, I'll bet (and someone else mentioned this as well) Apple can sell it for at least that much (+ time value of money). On (ii), I am inclined to cut some slack to Apple's management, since more than anything else, Apple seems to have been unable to rejuvenate iTunes organically (I'd add AppleTV interface and software to that list).

You know where kids get their music today? YouTube. Not for music videos, just the music. You know what kids watch today? YouTube. Minecraft and gaming videos. Maybe music sales are falling because of a sea change in music consumption in the youth demographic, which would mean that protecting the nest egg won't work when the tree just fell down.

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post #50 of 97
Quote:
Originally Posted by SpamSandwich View Post

Nonsense. The "hissy fits" are grounded in reality. Apple's history up to now has not been about chasing marketshare and protecting old ground, it has been about "skating to where the puck WILL be". The Beats deal is "sitting on the puck."

We can't possibly know that. All we know is that Apple is doing many things outside its norm by 1) making a huge purchase (8x more than NeXT, which is the highest purchase we're aware of), 2) keeping an acquisition as a separate entity and jeeping the branding (the next closest thing looks to be Siri which only kept its name, and 3) going after a highly established product, not a start up that is unknown.

But why is this inherently a bad thing? Thinking different isn't about doing the same thing over and over again in a niche manner; lets leave that to kids who express their "individuality" by all donning the same look and style. Thinking different was about thinking outside the box, and sometimes thinking outside the box means you need to think within in when you're history has been outside it (e.g.: Ender using a formation for his last battle against two armies).

That said, this could be a relative failure for Apple like Ping and many other attempts by Apple but we have so little information as to what Apple's longterm plans are that we can't rule out that Apple is skating to where the puck will be by virtue of not being privy of what Apple knows and sees. At this point I don't think we should second guess Apple's ability to know better than we do.
Edited by SolipsismX - 5/29/14 at 8:21am

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post #51 of 97
Quote:
Originally Posted by anantksundaram View Post

Not really. You're missing the point. It's about defending its leadership in existing turf (iTunes and music), turf that is a hugely important part of Apple's ecosystem, and one that made the iPod, iPhone, and iPad so successful in the first place.

If iTunes is slowing, Apple has to figure out a way to rejuvenate it to make it grow. There are only two options to do so: do it organically (R&D, or research and development), or inorganically (A&D, or acquisition and development). The latter approach is what, for example, made iTunes and Siri possible.

If it's the latter, the only relevant questions become: (i) Did Apple acquire at a reasonable price? and (ii) Will the acquisition help rejuvenate iTunes?

On (i), I am absolutely convinced -- subject to very sketchy data, although Apple will have had access to tons of it from its due diligence -- that $3B is a reasonable price, just for the Beats headphones piece of it. If there's not a fit there, I'll bet (and someone else mentioned this as well) Apple can sell it for at least that much (+ time value of money). On (ii), I am inclined to cut some slack to Apple's management, since more than anything else, Apple seems to have been unable to rejuvenate iTunes organically (I'd add AppleTV interface and software to that list).
I'd be curious to know how important iTunes (not the App Store) is to fueling hardware purchases. I use Spotify and can't remember the last time I bought anything off iTunes. I don't even use iTunes Radio because the sound quality is not nearly as good as Spotify. Apple needs a real differentiator here and it has to be more than curated playlists. I tried out Beats but there was nothing about it that would make me leave Spotify right now.
post #52 of 97
Quote:
Originally Posted by SolipsismX View Post


Apple is skating to where the puke will be 

 

I sure hope you're wrong about that :embarrass

post #53 of 97
Quote:
Originally Posted by SolipsismX View Post

We can't possibly know that. All we know is that Apple is doing many things outside its norm by 1) making a huge purchase (8x more than NeXT, which is the highest purchase we're aware of), 2) keeping an acquisition as a separate entity and jeeping the branding (the next closest thing looks to be Siri which only kept its name, and 3) going after a highly established product, not a start up that is unknown.

But why is this inherently a bad thing? Thinking different isn't about doing the same thing over and over again in a niche manner; lets leave that to kids who express their "individuality" by all donning the same look and style. Thinking different was about thinking outside the box, and sometimes thinking outside the box means you need to think within in when you're history has been outside it (e.g.: Ender using a formation for his last battle against two armies).

That said, this could be a relative failure for Apple like Ping and many other attempts by Apple but we have so little information as to what Apple's longterm plans are that we can't rule out that Apple is skating to where the puke will be by virtue of not being privy of what Apple knows and sees. At this point I don't think we should second guess Apple's ability to know better than we do.

"...we can't rule out that Apple is skating to where the puke will be..."

I know that was a typo, but I LOL'ed.

Here's another way to look at this. Tim Cook is an operations guy at heart. He's all about finding single points of failure and creating a safety net so the company can deliver the goods. Jony Ive and the design department represent a bottleneck for Tim. By hiring Ahrendts, by buying Beats, Cook in many respects is making an end run around their own internal 'single point of failure' where it is now taking a full year or more to update product. (Just a theory that might explain some of these recent actions from Cook's perspective)
Edited by SpamSandwich - 5/29/14 at 8:24am

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post #54 of 97
Quote:
Originally Posted by Rogifan View Post

I'd be curious to know how important iTunes (not the App Store) is to fueling hardware purchases. I use Spotify ....

I am sure Apple has the data, and knows it well. What you (or I speculate) about this is irrelevant beyond compare.

 

"I use Spotify.." therefore I know what dozens of millions of people are doing?! Wow, the arrogance (I've used that word in relation to your posts before) -- the silliness of generalizing about all of humanity from your one data point says it all for me.

post #55 of 97
Quote:
Originally Posted by SpamSandwich View Post

You know where kids get their music today? YouTube. Not for music videos, just the music. You know what kids watch today? YouTube. Minecraft and gaming videos. Maybe music sales are falling because of a sea change in music consumption in the youth demographic, which would mean that protecting the nest egg won't work when the tree just fell down.

Again, as implied by my reply to Rogifan above, let me ask you: you think you have better data on this than Apple does? Really?

 

C'mon, be serious. Please.

post #56 of 97
Quote:
Originally Posted by anantksundaram View Post

Again, as implied by my reply to Rogifan above, let me ask you: you think you have better data on this than Apple does? Really?

C'mon, be serious. Please.

It's not a problem if I'm wrong. It's a problem if I'm right.

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post #57 of 97
Quote:
Originally Posted by SpamSandwich View Post

...Cook in many respects is making an end run around their own internal 'single point of failure' where it is now taking a full year or more to update product.

How is this any different than under Jobs? Remember the Mac mini was going to die? AI had umpteen stories about its imminent death because it went so long between updates. The only thing that has moved to a longer release cycle is the iPod, for obvious reasons, but I believe Jobs was still in control when they started that model. I think it's been user Cook that Mac OS X has moved to a yearly release cycle… which I love.

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post #58 of 97
Quote:
Originally Posted by anantksundaram View Post
 

Again, as implied by my reply to Rogifan above, let me ask you: you think you have better data on this than Apple does? Really?

 

C'mon, be serious. Please.

 

Is data the whole story here?

 

All the data in the world doesn't guarantee that your plan will work.

 

I agree that Apple is late to the party on this one.

 

The writing is on the wall.

 

Only time will tell if this Beats strategy is what it will take to right the iTunes ship or even if Apple is able to pull it off.

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post #59 of 97
Quote:
Originally Posted by Rogifan View Post

What are you talking about? Lots of companies have cheaper sub brands. Gap has Old Navy. Ralph Lauren has Chaps. J Crew is creating a less expensive brand. Look at the auto industry where you have luxury brands like Lexus and their less expensive counterpart Toyota. The more I think about it the more I think it makes sense for Apple to utilize the Beats brand as a way to go downmarket. Or at least be something completely different from the Apple brand. Utilizing Beats to create a fun/colorful and perhaps less expensive line of products isn't being prissy. Of course I have no idea if this is in Apple's plans. The press release de-emphasized the hardware business and Cook did shove it under Schiller and not Ive or Riccio. So maybe Apple is planning to leave it as is and just reap the profits of the existing brand.

No, I agree that Apple can reach another huge market here, but I wouldn't call it "downmarket" by going "cheaper."

It's a matter of mindset, which Apple has shown us over and over again to be the primary starting point in this business of improving peoples' lives through artful technology.

Beats has already accomplished this with their headphones by going against sound reproduction principles and making an acoustic environment that can be taken out in the world. Their market, which is huge, wants this, and it's why the headphones are a success, not because they are "trendy" —awful, white-yuppy word.

So to suggest that Apple is going cheap and downmarket reveals a class bias that we don't want associated anywhere near this company. No, they are going outmarket, horizontally, into the majority of the earth's people, the post-colonial, post-industrial (including whites) young and ascendant aspirationals with attitude.

And this is what has been driving people crazy about this deal. You have to share your Apple with a new unfamiliar group of people. Calling it cheap and downmarket allows you to accept it without giving up your class superiority. Unacceptable. Better than before, but you're still hanging back.
post #60 of 97
Apple was very late to the subscription music train, this is them hopping aboard. Maybe they can catch up now. The only problem I had with it was the price, and this move by apple shows some desperation, but it's not like they can't afford it. I think the sum of all parts made it worthwhile for Apple in a way that it wouldn't for any other company. But separated, I'm not sure how each part will really survive. Does apple want to sell expensive headphones? Sure they can make an extra few hundred million a year - but at the expense of making their brand look like an over priced fashion statement? (Their headphones cost $14 a piece to manufacture). And the subscription service doesn't seem to be going anywhere too fast. The creative brains behind the company are promising to come up with products we can't even think of yet, sounds like some type of elixir they're selling tim. I hope tim isn't one of those elderly types that answers telemarketer phone calls, too. In the end, I think the only part of this package deal that means anything is the subscription service - and that's what cost $3 billion. Surprised they couldn't get a better service for that amount, or pay more for a better one. But, they can afford to place a bet on beats music with no problem.
post #61 of 97
Quote:
Originally Posted by pazuzu View Post

I can see some value in Iovine but what's the value of Dre? And no it's not because he's black.

Then what is it then? Without Dr. Dre there's no Beats by Dre and without Dr. Dre Interscope records were well on there way out of the business had it not been for him.  

post #62 of 97
Quote:
Originally Posted by SpamSandwich View Post

"...we can't rule out that Apple is skating to where the puke will be..."

I know that was a typo, but I LOL'ed.

Here's another way to look at this. Tim Cook is an operations guy at heart. He's all about finding single points of failure and creating a safety net so the company can deliver the goods. Jony Ive and the design department represent a bottleneck for Tim. By hiring Ahrendts, by buying Beats, Cook in many respects is making an end run around their own internal 'single point of failure' where it is now taking a full year or more to update product. (Just a theory that might explain some of these recent actions from Cook's perspective)
Ahrendts was hired to run retail. As far as I know she has nothing to do with product updates. And Beats severed ties with its 3rd party design firm. Design is transitioning from Ammunition to Ive's group. You really think Ive and the design department are the only ones responsible for bringing products to market?
post #63 of 97
Quote:
Originally Posted by Rogifan View Post

Ahrendts was hired to run retail. As far as I know she has nothing to do with product updates. And Beats severed ties with its 3rd party design firm. Design is transitioning from Ammunition to Ive's group. You really think Ive and the design department are the only ones responsible for bringing products to market?

Oh, I know what Ahrendts was hired for, but she was hired at a CEOs pay level and she ran a world class fashion company. She won't remain restricted to retail for long.

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post #64 of 97
Quote:
Originally Posted by Flaneur View Post

No, I agree that Apple can reach another huge market here, but I wouldn't call it "downmarket" by going "cheaper."

It's a matter of mindset, which Apple has shown us over and over again to be the primary starting point in this business of improving peoples' lives through artful technology.

Beats has already accomplished this with their headphones by going against sound reproduction principles and making an acoustic environment that can be taken out in the world. Their market, which is huge, wants this, and it's why the headphones are a success, not because they are "trendy" —awful, white-yuppy word.

So to suggest that Apple is going cheap and downmarket reveals a class bias that we don't want associated anywhere near this company. No, they are going outmarket, horizontally, into the majority of the earth's people, the post-colonial, post-industrial (including whites) young and ascendant aspirationals with attitude.

And this is what has been driving people crazy about this deal. You have to share your Apple with a new unfamiliar group of people. Calling it cheap and downmarket allows you to accept it without giving up your class superiority. Unacceptable. Better than before, but you're still hanging back.
Oh please what a load of BS. This has nothing to do with class or race. And going downmarket doesn't mean making cheap crap. Apple products have a certain design language. Maybe Ive can use the Beats brand as a whole other design language. Think back to colored iMacs and iPods. Use Beats as a brand where the designers can have more fun, be more expressive. And yes, perhaps create a line of products that are less expensive. These new inexpensive Motorola phones are actually getting good reviews. I think Ive and the hardware engineering team could absolutely create a really nice $350 off contract 5C style smartphone that would be a gateway into the iOS ecosystem. Use Beats as the brand for this. Coordinate the design with Beats headphones and hand it off to Angela Anrendts to make everyone who walks by an Apple store want to stop in and see it. And hand it off to Schiller to make sure it gets prime advertising. And it doesn't just have to be phones. This could includes iPods, speakers wearables, etc. This wouldn't be Apple just trying to buy cool but creating their own new cool and increasing traffic into Apple stores.
post #65 of 97
Quote:
Originally Posted by SpamSandwich View Post

Oh, I know what Ahrendts was hired for, but she was hired at a CEOs pay level and she ran a world class fashion company. She won't remain restricted to retail for long.
So what are you suggesting? That Jony Ive is going to start taking product design orders from her? Or that Cook is going to move certain aspects of design away from Ive and under her?
post #66 of 97

Gene Munster was originally confused by the Beats deal when rumors first surfaced, but like others, he's begun to warm up to the marriage with Apple. In particular, he believes that adding Iovine and Dre could "help propel Apple into the next level in its content offering, particularly in video."

 

This is complete BS!

 

Iovine said yesterday during that recode interview that he will not be involved with any video, it's just about the music. 

post #67 of 97
Quote:
Originally Posted by Apple ][ View Post

Gene Munster was originally confused by the Beats deal when rumors first surfaced, but like others, he's begun to warm up to the marriage with Apple. In particular, he believes that adding Iovine and Dre could "help propel Apple into the next level in its content offering, particularly in video."

This is complete BS!

Iovine said yesterday during that recode interview that he will not be involved with any video, it's just about the music. 
All the more reason Apple should focus on expanding Beats hardware (while improving it of course). I don't see Iovine as Apple's meal ticket to content deals. And streaming music isn't sexy like new hardware is.
post #68 of 97
Quote:
Originally Posted by island hermit View Post

 

All the data in the world doesn't guarantee that your plan will work.

I never said or implied that in any of my posts.

post #69 of 97
Quote:
Originally Posted by anantksundaram View Post
 

I never said or implied that in any of my posts.

 

It's hard to say what you were implying or saying because Rogifan and Spam (who I was referring to) were saying completely different things... and yet you lumped them both together in that reply.

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post #70 of 97

I wonder when Apple is going to release their own sneaker line? 

 

If grabbing money from urban people and people with darker complexions is the main goal here, according to certain defenders of this deal, then Apple should definitely make a sneaker line. Certain people will literally stab and kill for sneakers and trendy sneakers are a high profit, high margin business, and this is all about making money according to certain people, isn't it?

 

I also have a hard time telling the difference between what certain defenders of this deal are saying and what Samsung trolls usually say, because the messages are both similar. Apple has lost their cool and they need to capture the youth market. I find that reasoning to be absurd, because when somebody is spouting Samsung propaganda, then that is not somebody who I can take seriously.

 

I don't think that Apple has lost their cool at all, and I also don't think that Apple needs to pander to any certain markets. Just make the best devices and people will buy them.

post #71 of 97
Quote:
Originally Posted by SolipsismX View Post


Sure they do, they say Apple should have outbid them. 1biggrin.gif It's some weird aberration of the positional good by proxy where they only want Apple to buy it because it's desired by another company. If Samsung had wanted Beats those same people would probably be ecstatic that Apple bought them first.

A few days ago, I mentioned an article out of South Korea stating on unnamed source in the know mentioned Samsung had been interested in Beats and Apple decided to purchase Beats to keep it out of the hands of Samsung! Up until that point no other company (Amazon, Facebook, Google, Microsoft, etc.) had been mentioned as having any interest whatsoever in Beats. Then suddenly an unnamed source in the know mentions Samsung.  Go figure! The funny thing about that mention is it seemed very dishonest and thankfully died very quickly.

post #72 of 97

I just can't wrap my head around the decision to maintain the beats brand.  People are virtually ignoring the enormous sea change that this represents for Apple.  A year ago, Cook consolidated product development for software and hardware and put both under Ive.  And at the time, the reason given was that he wanted to ensure that every product Apple builds works together seamlessly across all aspects of the human interface, with the same attention to detail and design thoughtfulness that the hardware has.

 

Now flash forward a year, and Apple has not only acquired an entire brand, they plan to continue to operate that brand, which is for Apple a gigantic change in and of itself.  And even more interesting, they aren't putting the hardware or software design for this entirely new brand under Ive, they are putting it under Phil Schiller, a marketing guy.

 

So, we have two dueling realities.  One is the reality where Apple is fanatical to detail and to anything that may sully its brand, and where they have vested tremendous power over the design of their products in just one individual, ostensibly all in service of protecting the core design centric ethos of the company.  And then we have this entirely separate reality, where not only is Apple's brand irrelevant, they have completely sidestepped the authority over design that is pervasive in the core brand.

 

What is up with that?

 

Everyone is talking about the streaming music app, the headphones, Jimmy Iovine, etc. and trying to make sense of this from the perspective of revenue.  But people seem to be ignoring the fundamental nature of the change in Apple's business practice that this acquisition represents.  This is a significant departure for Apple from the fundamental nature of how they have run their business.  And I don't think that change can be properly understood by framing it with arguments about talent acquisition, digital rights, streaming music, or any of that.  Either this represents a highly strategic move which will see Apple heavily leverage the Beats brand going forward... or it is an enormous mistake.

 

Honestly I'm not really sure which this is at this point - genius or disaster.  But I cannot believe that Apple would make these very significant changes to the core of how they do business just to get at some headphones and a streaming app.  There has to be much more to this picture.

post #73 of 97

There is absolutely no downside. It's like me spending $3. If they shutter Beats tomorrow it won't hurt Apple. I'm optimistic that good can come of the acquisition. The vast majority of analysts agree...for what that's worth.

post #74 of 97
Quote:

Originally Posted by AppleInsider View Post


While analyst Rod Hall... 

In fact, Hall said he wouldn't be surprised to see Apple sell off Beats Electronics at some point in the future, allowing the headphone making side of the business to stand on its own while Apple would keep the talent and Beats Music service it has acquired.

Interesting point here.  Even if it sells for 1.5-2b, isn't that worth what iovine, dre, and beats music bring to the table.  This is a definite possibility down the road potentially.

 

Quote:
 Gene Munster...
Munster also noted that because the $3 billion Beats purchase is Apple's largest acquisition in history, it could open the door for other purchases, including potential Internet services outside of content.

As if this freakin' blow-hard needed any more rumor ammunition...

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2014 27" Retina iMac i5, 2012 27" iMac i7, 2011 Mac Mini i5
iPad Air 2, iPad Mini 2, iPhone 6 Plus, iPhone 6, iPod Touch 5
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post #75 of 97
Quote:
Originally Posted by Hans01 View Post
 

There is absolutely no downside. It's like me spending $3. If they shutter Beats tomorrow it won't hurt Apple. I'm optimistic that good can come of the acquisition. The vast majority of analysts agree...for what that's worth.

You're worth all of $544?

post #76 of 97
Quote:
Originally Posted by anantksundaram View Post
 

You're worth all of $544?

 

If that's the case, then I would strongly suggest that he doesn't spend his $3.00, because he'll likely need it.:lol:

post #77 of 97
Quote:
Originally Posted by tt92618 View Post

I just can't wrap my head around the decision to maintain the beats brand.  People are virtually ignoring the enormous sea change that this represents for Apple.  A year ago, Cook consolidated product development for software and hardware and put both under Ive.  And at the time, the reason given was that he wanted to ensure that every product Apple builds works together seamlessly across all aspects of the human interface, with the same attention to detail and design thoughtfulness that the hardware has.

Now flash forward a year, and Apple has not only acquired an entire brand, they plan to continue to operate that brand, which is for Apple a gigantic change in and of itself.  And even more interesting, they aren't putting the hardware or software design for this entirely new brand under Ive, they are putting it under Phil Schiller, a marketing guy.

So, we have two dueling realities.  One is the reality where Apple is fanatical to detail and to anything that may sully its brand, and where they have vested tremendous power over the design of their products in just one individual, ostensibly all in service of protecting the core design centric ethos of the company.  And then we have this entirely separate reality, where not only is Apple's brand irrelevant, they have completely sidestepped the authority over design that is pervasive in the core brand.

What is up with that?

Everyone is talking about the streaming music app, the headphones, Jimmy Iovine, etc. and trying to make sense of this from the perspective of revenue.  But people seem to be ignoring the fundamental nature of the change in Apple's business practice that this acquisition represents.  This is a significant departure for Apple from the fundamental nature of how they have run their business.  And I don't think that change can be properly understood by framing it with arguments about talent acquisition, digital rights, streaming music, or any of that.  Either this represents a highly strategic move which will see Apple heavily leverage the Beats brand going forward... or it is an enormous mistake.

Honestly I'm not really sure which this is at this point - genius or disaster.  But I cannot believe that Apple would make these very significant changes to the core of how they do business just to get at some headphones and a streaming app.  There has to be much more to this picture.
Robert Brunner who is currently responsible for Beats design said that over the coming months his firms duties will be transitioned to Apple's design team. Putting this under Schiller may have more to do with marketing and sales. Or it could be that Ive has more than enough on his plate and dealing with more than product design would stretch him too thin.
post #78 of 97
Quote:
Originally Posted by Apple ][ View Post
 
Quote:
Originally Posted by anantksundaram View Post
 

You're worth all of $544?

 

If that's the case, then I would strongly suggest that he doesn't spend his $3.00, because he'll likely need it.:lol:

Just to clarify -- although I am fairly sure that you did not at all intend to imply it -- I am not saying, as some here and many in the analyst community have, that the $3B is trivial for Apple. The only argument I have is over whether Apple gets at least $3B in value from the Beats purchase, that's all. :) 

post #79 of 97

Some people here are funny... "I don't like Beats headphones - they're cheap and stink, therefore this is a horrible deal! They should buy the headphones I personally use." Good thing you don't run a billion dollar company if that's your rationale, to only invest in what you personally like, eff the public majority or the companies assets.

post #80 of 97
Quote:
Originally Posted by SolipsismX View Post


How is this any different than under Jobs? Remember the Mac mini was going to die? AI had umpteen stories about its imminent death because it went so long between updates. The only thing that has moved to a longer release cycle is the iPod, for obvious reasons, but I believe Jobs was still in control when they started that model. I think it's been user Cook that Mac OS X has moved to a yearly release cycle… which I love.

 

I'm still just trying to get a handle on the nature of this deal and working through possible "unadvertised" scenarios helps to do that.

 

Imagine this... Apple discovered their patents were not enough to prevent copycats like Samsung from stealing business, so they decide to buy Beats as entry to the currently Samsung-dominated (by quantity, not by profit) global "smartphone" market. Suppose in a couple of years Apple introduces a Beats line of phones...(wait for it)... and some of those Beats phones also run Android. This would give Apple the trojan horse to sneak in and undercut Samsung and destroy them from the inside. In fact, Apple could mimic Samsung "note for note" and basically pull a Samsung on Samsung! And this would have the added benefit of favoring Apple's Android apps that siphon away Google's advertising revenue.


Edited by SpamSandwich - 5/29/14 at 12:30pm

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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