i think Samsung's advertising stung Apple and the marketing department is worried that those ads dinged Apple's "cool" factor. And buying a trendy headphone maker that teenagers like might get some of that "cool" back.
OK, I not only think that's not only a fair point but also insightful one. I wouldn't be adverse to more elaboration on that topic.
I have a pair of Sony headphones that are 20 years old and which sound better than any Beats. The driver diaphragms have a layer of vapour deposited amorphous diamond for stiffness. The Headband has Nitinol memory alloy which allows them to be folded into a small volume for portability.
300,000 subscribers at 3B is $10,000 a head. Lol - don't think so. Good luck with even getting the purchase price back from this deal. It's another, though vastly more expensive, liquid metal purchase IMO. Still, Apple can afford to get it wrong if that's how it turns out.
I assume Apple is expecting to get the purchase price back based off of headphone sales. But for that you would need to assume Beats will continue to remain popular and Apple can continue to sell lots of their headphones at a high markup.
Maybe he is, but I queried if you think Beyoncé would marry him if he hated women given what she signs about? I wouldn't think so but, as you note, I don't know them personally. (If Beyoncé ever gets a divorce I call dibs )
I have no idea. It could all be a marketing stunt for all we know. To use celebrity couples as a measuring stick of character, morals, or really anything in the "real" world- isn't really a good barometer. You can have dibs- I just need one night- really 2-3 minutes.
Mine are sony and I do not remember the model since I do not use them that offer, my kids use them more than I do. I know Sony Quality and performance have not keep up, however, At the time they had the purest tone quality of any head phone of the time and they did not cost as much as beats. I never tried them and I speaking from what I read, Beats do not reproduce the sound as you would expect.
I guess if all you are listing to is electronic generated music and sound, there is nothing for you to compare to so it probably sounds okay to most people.
Anecdotal opinions from around the web seem to indicate that many younger people go to YouTube for their music listening now. Yes, listening, not for the videos. I've done my own research and find all kinds of obscure music on YouTube that has been ripped. And kids don't pay for music subscriptions. I wonder if both paid and subscription music services are a dead end and we're headed back to expectations of free music everywhere once again, a la Napster.
I've found music on YT because in a few minor cases, the song wasn't available anywhere else. But I'm pretty sure YT has to respond to DMCA take down requests from recording labels, so not quite sure why this is even a thing.
I assume Apple is expecting to get the purchase price back based off of headphone sales. But for that you would need to assume Beats will continue to remain popular and Apple can continue to sell lots of their headphones at a high markup.
No- that is clearly not the case.
It's not a simple "hardware purchase". $200-300 million in hardware profit to try to clear a $3.2 billion purchase price? I don't even want to do the math- just keeping status quo, they would never make their money back when you factor interest. Even if they doubled the revenue and profits of Beats to 600 million profit- its what- 50 years to make back your money?
It could all be a marketing stunt for all we know. To use celebrity couples as a measuring stick of character, morals, or really anything in the "real" world- isn't really a good barometer.
Then couldn't the same be said for using musicians for their lyrics in decades old songs as a barometer of their character, morals, or really anything in the "real" world?
He's pointing out that even in a supporting role for their HW sales Apple's SW and expansive cloud-based services are exceptionally profitable. Anything that can add to that will help sell their devices and probably lead to one device category sale become a second device category sale (like an iPhone buyer then buying an iPad and/or Mac).
Then I didn't misunderstand him, and I still disagree. There is no reason to run out and spend $3B to bolster revenue on a service which earns a small (though significant in total $ as it may be compared to other companies) percentage of your overall revenue and profit that exists solely to support your main offering: hardware. They've never spent this much to bolster their hardware business, it makes no sense to spend this much on one of their smallest contributing (and ancillary) offerings. It's a lot to spend to make the iTunes system so much more appealing that people begin to think of iTunes as a reason to buy Apple products - it seems an odd lever to pull.
I just realized that most people are upset cause of racism and nothing else. Apple might have a black guy who curses working as an executive, as opposed to a white guy who drops acid.
I know more about Dre than Iovine, but Dre fits in with the apple mentality. Running his record label, he believed in releasing a product only when it was perfect (he's worked on his last cd for about 13 years now and refuses to release it because he doesn't feel it's good enough, and did that with many artist). The music might not be what you like but in his genre, he release a ton of number 1 CDs. And as far as the cursing goes, he uses ghost writers, he isn't a rapper, so he just said the words. Maybe thatll make some of you feel better instead of posting how he will buy all that "bling" and waste all his money. (Apparently no one realizes that he managed to come from nothing to having 500 million before this deal)
I've been on these forums for years, following Apple for longer. As a black guy, your race card arguments are wholly invalid here.
I hope it's not an indicator of Apple chasing trends, versus setting them.
Please. If they wanted to chase trends, they would make a smaller iPad and a bigger iPhone and someday a 6" phablet that replaces both and runs Android and is stuffed with geek-self-esteem-raising specs. /s
I'm very disappointed by Apple's performance in the music streaming space considering it had the premier music service in the world a few short years ago. What has Apple been doing with iTunes the last 3 years? Tim Cook really took his eye off the ball considering he did so much damage to iTunes in such a short period of time that Apple's only fix is to replace iRadio with Beats. Awful CEOing!
OK, I not only think that's not only a fair point but also insightful one. I wouldn't be adverse to more elaboration on that topic.
Just a guess on my part. I might be way off base. But those leaked emails from the patent trial indicate that Samsung marketing was very much on Apple's mind, and there was even one Samsung ad (I believe it was a Super Bowl ad) that Schiller said was very good. Also Schiller sent an email to Cook suggesting Apple might need to shake up what agencies they work with. That's what I'm basing this on.
Then I didn't misunderstand him, and I still disagree. There is no reason to run out and spend $3B to bolster revenue on a service which earns a small (though significant in total $ as it may be compared to other companies) percentage of your overall revenue and profit that exists solely to support your main offering: hardware. They've never spent this much to bolster their hardware business, it makes no sense to spend this much on one of their smallest contributing (and ancillary) offerings. It's a lot to spend to make the iTunes system so much more appealing that people begin to think of iTunes as a reason to buy Apple products - it seems an odd lever to pull.
That's like saying they shouldn't invest in the Mac line simply because the iPhone line makes a lot more by comparison. Their iTunes/Cloud umbrella is massive and I think Apple should do whatever it can to not only make it better but also tie it into their HW to help increase sales and profit across the board. I'm not sure how you can disagree with that.
It would be their largest acquisition by about 7x but why does that matter if they can not only get that money back within a couple years but also turn a hefty profit and make both their HW and SW much better products better as a result. Of course, even if all the rumours are true there is no guarantee that it would ultimately increase Apple's profits but that's beside the point as any such acquisition would clearly be made only if Apple did think it would lead to that goal.
Just a guess on my part. I might be way off base. But those leaked emails from the patent trial indicate that Samsung marketing was very much on Apple's mind, and there was even one Samsung ad (I believe it was a Super Bowl ad) that Schiller said was very good. Also Schiller sent an email to Cook suggesting Apple might need to shake up what agencies they work with. That's what I'm basing this on.
1) It's the what-if opinions that spark the best conversations. So long as you word an opinion as an opinion, and not as an absolute statement, it's all good.
2) I seem to recall something from Apple that indicated they were concerned about Samsung's ads having that effect.
The other issue Apple will have with Beats is the fact that so many knock-off of there headphone are all over the market. Why would you pay the big $ that beats wants when you get find a near perfect knock-off for $30. Beats has not defend this space well enough and it would create a problem for Apple, the revenue stream is at risk.
I suspect the company Beats hired in China to make their headphones is making some extra for themselves to sell.
It's not a simple "hardware purchase". $200-300 million in hardware profit to try to clear a $3.2 billion purchase price? I don't even want to do the math- just keeping status quo, they would never make their money back when you factor interest. Even if they doubled the revenue and profits of Beats to 600 million profit- its what- 50 years to make back your money?
It has to be something more.
What?! 600 million is 0.6 billion. That's 5.3 years.
Then couldn't the same be said for using musicians for their lyrics in decades old songs as a barometer of their character, morals, or really anything in the "real" world?
Why was that quote attributed to me? I didn't write that.
What?! 600 million is 0.6 billion. That's 5.3 years.
You're right- But only if that $3.2 billion is sitting under a mattress at Tim's house or buried in the back yard of 1 Cupertino Loop
When I'm making an offer or acquisition I use 10% as my interest and calculate that with my added synergies and projections. Most use 8%. Some aggressively growing and profitable businesses use even higher.
A rudimentary example-
A company profits $100k ebitda. After the added synergies it makes $200k. I want to make the money back in 3-5 years. I personally don't borrow money so I calculate my interest. So if I really want the company, and I'm looking at a 4 year return, offering $550k is the equivalent of offering $800k to my bottom line.
That all said- this is speaking in the billions. I've never made a million dollar acquisition. So my piddly few hundred thousand here and there is likely a completely different ballgame.
I have no idea the tax implications, or really anything about it. But I do know it won't simply be a hardware purchase based on the numbers. $3.2b is WAY too much. If someone sold me half that- then yes, I could see it.
Comments
OK, I not only think that's not only a fair point but also insightful one. I wouldn't be adverse to more elaboration on that topic.
I hope it's not an indicator of Apple chasing trends, versus setting them.
Maybe he is, but I queried if you think Beyoncé would marry him if he hated women given what she signs about? I wouldn't think so but, as you note, I don't know them personally. (If Beyoncé ever gets a divorce I call dibs )
I have no idea. It could all be a marketing stunt for all we know. To use celebrity couples as a measuring stick of character, morals, or really anything in the "real" world- isn't really a good barometer. You can have dibs- I just need one night- really 2-3 minutes.
What is the manufacturer/model of your headset?
Mine are sony and I do not remember the model since I do not use them that offer, my kids use them more than I do. I know Sony Quality and performance have not keep up, however, At the time they had the purest tone quality of any head phone of the time and they did not cost as much as beats. I never tried them and I speaking from what I read, Beats do not reproduce the sound as you would expect.
I guess if all you are listing to is electronic generated music and sound, there is nothing for you to compare to so it probably sounds okay to most people.
I've found music on YT because in a few minor cases, the song wasn't available anywhere else. But I'm pretty sure YT has to respond to DMCA take down requests from recording labels, so not quite sure why this is even a thing.
I assume Apple is expecting to get the purchase price back based off of headphone sales. But for that you would need to assume Beats will continue to remain popular and Apple can continue to sell lots of their headphones at a high markup.
No- that is clearly not the case.
It's not a simple "hardware purchase". $200-300 million in hardware profit to try to clear a $3.2 billion purchase price? I don't even want to do the math- just keeping status quo, they would never make their money back when you factor interest. Even if they doubled the revenue and profits of Beats to 600 million profit- its what- 50 years to make back your money?
It has to be something more.
Then couldn't the same be said for using musicians for their lyrics in decades old songs as a barometer of their character, morals, or really anything in the "real" world?
edit: fixed quote.
He's pointing out that even in a supporting role for their HW sales Apple's SW and expansive cloud-based services are exceptionally profitable. Anything that can add to that will help sell their devices and probably lead to one device category sale become a second device category sale (like an iPhone buyer then buying an iPad and/or Mac).
Then I didn't misunderstand him, and I still disagree. There is no reason to run out and spend $3B to bolster revenue on a service which earns a small (though significant in total $ as it may be compared to other companies) percentage of your overall revenue and profit that exists solely to support your main offering: hardware. They've never spent this much to bolster their hardware business, it makes no sense to spend this much on one of their smallest contributing (and ancillary) offerings. It's a lot to spend to make the iTunes system so much more appealing that people begin to think of iTunes as a reason to buy Apple products - it seems an odd lever to pull.
I've been on these forums for years, following Apple for longer. As a black guy, your race card arguments are wholly invalid here.
Next
Please. If they wanted to chase trends, they would make a smaller iPad and a bigger iPhone and someday a 6" phablet that replaces both and runs Android and is stuffed with geek-self-esteem-raising specs. /s
That's like saying they shouldn't invest in the Mac line simply because the iPhone line makes a lot more by comparison. Their iTunes/Cloud umbrella is massive and I think Apple should do whatever it can to not only make it better but also tie it into their HW to help increase sales and profit across the board. I'm not sure how you can disagree with that.
It would be their largest acquisition by about 7x but why does that matter if they can not only get that money back within a couple years but also turn a hefty profit and make both their HW and SW much better products better as a result. Of course, even if all the rumours are true there is no guarantee that it would ultimately increase Apple's profits but that's beside the point as any such acquisition would clearly be made only if Apple did think it would lead to that goal.
1) It's the what-if opinions that spark the best conversations. So long as you word an opinion as an opinion, and not as an absolute statement, it's all good.
2) I seem to recall something from Apple that indicated they were concerned about Samsung's ads having that effect.
The other issue Apple will have with Beats is the fact that so many knock-off of there headphone are all over the market. Why would you pay the big $ that beats wants when you get find a near perfect knock-off for $30. Beats has not defend this space well enough and it would create a problem for Apple, the revenue stream is at risk.
I suspect the company Beats hired in China to make their headphones is making some extra for themselves to sell.
What?! 600 million is 0.6 billion. That's 5.3 years.
Why was that quote attributed to me? I didn't write that.
But them google ad impressions won't serve themselves up.
Well I'm dr Dre and things just ain't the same for gangsters.
With a little imagine on the internet there's no limit to what you can....imagine...
What?! 600 million is 0.6 billion. That's 5.3 years.
You're right- But only if that $3.2 billion is sitting under a mattress at Tim's house or buried in the back yard of 1 Cupertino Loop
When I'm making an offer or acquisition I use 10% as my interest and calculate that with my added synergies and projections. Most use 8%. Some aggressively growing and profitable businesses use even higher.
A rudimentary example-
A company profits $100k ebitda. After the added synergies it makes $200k. I want to make the money back in 3-5 years. I personally don't borrow money so I calculate my interest. So if I really want the company, and I'm looking at a 4 year return, offering $550k is the equivalent of offering $800k to my bottom line.
That all said- this is speaking in the billions. I've never made a million dollar acquisition. So my piddly few hundred thousand here and there is likely a completely different ballgame.
I have no idea the tax implications, or really anything about it. But I do know it won't simply be a hardware purchase based on the numbers. $3.2b is WAY too much. If someone sold me half that- then yes, I could see it.