<span style="line-height:1.4em;">Look at these and note what is happening toApple's content and services business categories. Especialy what is happening with</span>
<em style="line-height:1.4em;">Music</em>
<span style="line-height:1.4em;">vis a vis</span>
<em style="line-height:1.4em;">Services</em>
<span style="line-height:1.4em;">.</span>
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 hardware.
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 from Apple.
Where are those Apple customers spending their music money?
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?
Why?
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?
they have 70% of the consumer premium/high end headphone business.
No, it is not a premium brand. It is a cheap brand that gets away with selling low quality headphones at premium prices. Just the opposite of what Apple is all about. A premium brand in this area would be Sennheiser, AKG, Stax, Beyer, B&W etc.... I prefer Stax (I mainly use the SR-009 - probably the best headphones in the world), but I also listen to Sennheiser (HD800 for their exeptional sound stage) and have a set of AKG 701 I use occasionally. On the move I usually use Sennheisers, but also have a set of Bose (for their exceptionally good noise reduction system). Qualitywise Beats are really way, way, way down the ladder. Market share does not make it a premium brand.
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!
IMO this is on Eddy Cue. He's been running iTunes since forever. Obviously the buck stops with Cook but Cue is the DRI (directly responsible individual) in Apple speak.
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.
Your observation is interesting. In the past, when uploading videos to YT, you had to be careful with musical content. YT would scan the music, build a fingerprint, and compare that to a database of copyrighted music fingerprints. If it found a match, it would warn you and/or take down the video.
Yesterday I was simulating building a iBeata-style scattershot playlist by searching and posting YT videos on the other AI thread. Many of these videos are just pictures of the album cover with audio as accompaniment.
I understand what you mean by "go to YouTube for their music listening".
What I don't understand is why YT allows free access to copyright material.
No question Beats has a great brand proposition for the youth market (even if their headphones suck). If Apple was really after great headphone hardware, they would have looked elsewhere (Audio Technica?) They want the brand and the streaming service expertise. If they sell a few headphones in the process, great.
No, actually you did nothing to sway my opinion, I'm familiar with those arguments, people have been making them for years, they've never been true before and there's no reason to believe that's going to change.
It stems from a basic misunderstanding of the purpose of iTunes as it relates to Apple, why it exists and what it means to the company. iTunes is an anomaly, it's like a "loss leader" but it makes money (quite a lot), and for some reason people assume that makes it a business that Apple will/does/should treat as a separate going concern regardless what happens to Apple's hardware business. What I mean is that people think that iTunes would remain around long after Apple stopped making hardware, which couldn't be further from the truth.
Yes, iTunes (the entire system) is a benefit to Apple customers, yes it's a reason people are willing to pay *more* for Apple products, yes it adds value to Apple's products, but no, it isn't the main reason Apple exists, and no it wouldn't continue as a business if there were no hardware for it to support, which is what it is, a support division that ends up making them money.
The business model of Apple's is exactly the opposite to that of Amazon's, which sells hardware (cheaply) through which it can sell its services (same with Google) which is where it makes all its money. Putting $3B into an ancillary service offering seems to me to be exactly backwards to Apple's business model, where it would make sense to do it if you were Amazon or Google, but not Apple, which is why people here (in this thread and elsewhere) believe there's more to this acquisition than an overpriced upgrade to what they already possess in their portfolio of offerings (ignoring the Beats headphones business).
Do I think it might attract more people to buy Apple products, yes, I think that's a safe assumption. Do I think it's possible to realise enough of those additional sales to warrant and justify this $3B investment? Absolutely not.
That would please the self-important tech pundits and Valley chinwags, but so would Apple making Android phablets. In other words, Apple's doesn't acquire companies to impress the pundits.
Cheaper and better to buy viable seeds and grow your own -- superior results at a fraction of the cost.
No, it is not a premium brand. It is a cheap brand that gets away with selling low quality headphones at premium prices. Just the opposite of what Apple is all about. A premium brand in this area would be Sennheiser, AKG, Stax, Beyer, B&W etc.... I prefer Stax (I mainly use the SR-009 - probably the best headphones in the world), but I also listen to Sennheiser (HD800 for their exeptional sound stage) and have a set of AKG 701 I use occasionally. On the move I usually use Sennheisers, but also have a set of Bose (for their exceptionally good noise reduction system). Qualitywise Beats are really way, way, way down the ladder. Market share does not make it a premium brand.
It is a premium BRAND, but not a premium product. The BRAND allows them to sell an ordinary product at high prices. The BRAND is doing all the work here, not the product itself. If Apple was really interested in audio quality they would have purchased a company like Grado. They would have given Tomilinson Holman carte blanche to improve the audio hardware in all Apple products to a higher standard. Apple wants what the BRAND has to offer, not specifically the products. Let's face it, almost 100% of headphone buyers out there are uninformed. Accuracy, neutrality, sound stage, linearity, distortion, presence - none of these words mean anything to those buyers. The people who care about such things (like me and you) are in an extreme minority, thus making our wishes irrelevant to companies like Beats and even Apple. There are not enough of us to sell to and thus make any sort of profit for giant companies. It appears to me that any Beats acquisition is mostly a BRAND grab and maybe a software/algorithm grab.
The question is how that brand has been built. Apple was built up by quality and innovation, Coca Cola was built because they had a product nobody else had etc... What has built the brand Beats? They have always sold low quality products - they have nothing that distinguishes them from other producers (apart from selling overpriced junk).
I guess it all comes down to how one defines the word premium. For me, in the context of Apple, it means superior quality. For others it might mean expensive, irrespective of quality.
I agree with you that I think Beats are overpriced for what you get, but the masses don't agree with us. It's all subjective. They sell well and people are happy to pay the premium price for what they perceive to be a better quality product. Go out and find people who have spent hundreds of dollars on a pair of Beats headphones and ask them how they feel about them and why they bought them. Obviously there's the design aspect that people like, but I suspect that a vast majority will also be very pleased with the quality of their headphones. I also suspect that a vast majority would agree with someone who said that they have superior quality in relation to other headphones.
IMO they are keeping the Beats brand alive. Selling headphones is one thing but Id like to see them making plastic colorful phones (like the 5c series maybe with a little less functionality) and selling them at the $300 price range. they cant do that right now and market them as "iphone" (that would dilute the brand) but they can surely make them and market them as "beats" with a big red "b" logo smack on the reverse side! thats what I wanna see!
How is Beats perceived as a premium brand? Just because their headphones are expensive? I would argue Beats is perceived as an overpriced brand. I don't get why Apple would want to be associated with that.
As well as the streaming service and Iovine's talent, this deal will give Apple and Jony a smaller boutique brand under the Apple umbrella in which to design cool products but without the stress of it being an "Apple Product" and all the baggage that comes with that. Think of the Beats hardware as a place for Jony and his team to play, take some risks and make some great stuff.
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)
Was wondering when someone would play the old race card. All that pent up rage for Apple coloring all those headphones white I guess. I didn't know that Iovine was black.
they have 70% of the consumer premium/high end headphone business.
No, it is not a premium brand. It is a cheap brand that gets away with selling low quality headphones at premium prices. Just the opposite of what Apple is all about. A premium brand in this area would be Sennheiser, AKG, Stax, Beyer, B&W etc.... I prefer Stax (I mainly use the SR-009 - probably the best headphones in the world), but I also listen to Sennheiser (HD800 for their exeptional sound stage) and have a set of AKG 701 I use occasionally. On the move I usually use Sennheisers, but also have a set of Bose (for their exceptionally good noise reduction system). Qualitywise Beats are really way, way, way down the ladder. Market share does not make it a premium brand.
Oh, enough with this silly headphone snobbery. It would be just tiresome if it weren't so laughably off.
With lossy AAC/MP3 files, having a great versus a mediocre headphone just gets you.... mediocre sound, regardless of what you think or say. (As to the bass-heavy critique -- that others have brought up -- just change the equalizer preset and stop the whining).
Comments
What you say was true for much of the last decade, but times are changing -- at least for Apple's music content and music hardware.
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 from Apple.
Where are those Apple customers spending their music money?
If those Apple customers are looking elsewhere for their music -- might they look elsewhere for other purchases?
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?
Why?
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.
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?
its a premium brand.
they have 70% of the consumer premium/high end headphone business.
No, it is not a premium brand. It is a cheap brand that gets away with selling low quality headphones at premium prices. Just the opposite of what Apple is all about. A premium brand in this area would be Sennheiser, AKG, Stax, Beyer, B&W etc.... I prefer Stax (I mainly use the SR-009 - probably the best headphones in the world), but I also listen to Sennheiser (HD800 for their exeptional sound stage) and have a set of AKG 701 I use occasionally. On the move I usually use Sennheisers, but also have a set of Bose (for their exceptionally good noise reduction system). Qualitywise Beats are really way, way, way down the ladder. Market share does not make it a premium brand.
Your observation is interesting. In the past, when uploading videos to YT, you had to be careful with musical content. YT would scan the music, build a fingerprint, and compare that to a database of copyrighted music fingerprints. If it found a match, it would warn you and/or take down the video.
Yesterday I was simulating building a iBeata-style scattershot playlist by searching and posting YT videos on the other AI thread. Many of these videos are just pictures of the album cover with audio as accompaniment.
I understand what you mean by "go to YouTube for their music listening".
What I don't understand is why YT allows free access to copyright material.
For example:
[VIDEO]
See how that works?
Happy, now?
No, actually you did nothing to sway my opinion, I'm familiar with those arguments, people have been making them for years, they've never been true before and there's no reason to believe that's going to change.
It stems from a basic misunderstanding of the purpose of iTunes as it relates to Apple, why it exists and what it means to the company. iTunes is an anomaly, it's like a "loss leader" but it makes money (quite a lot), and for some reason people assume that makes it a business that Apple will/does/should treat as a separate going concern regardless what happens to Apple's hardware business. What I mean is that people think that iTunes would remain around long after Apple stopped making hardware, which couldn't be further from the truth.
Yes, iTunes (the entire system) is a benefit to Apple customers, yes it's a reason people are willing to pay *more* for Apple products, yes it adds value to Apple's products, but no, it isn't the main reason Apple exists, and no it wouldn't continue as a business if there were no hardware for it to support, which is what it is, a support division that ends up making them money.
The business model of Apple's is exactly the opposite to that of Amazon's, which sells hardware (cheaply) through which it can sell its services (same with Google) which is where it makes all its money. Putting $3B into an ancillary service offering seems to me to be exactly backwards to Apple's business model, where it would make sense to do it if you were Amazon or Google, but not Apple, which is why people here (in this thread and elsewhere) believe there's more to this acquisition than an overpriced upgrade to what they already possess in their portfolio of offerings (ignoring the Beats headphones business).
Do I think it might attract more people to buy Apple products, yes, I think that's a safe assumption. Do I think it's possible to realise enough of those additional sales to warrant and justify this $3B investment? Absolutely not.
Cheaper and better to buy viable seeds and grow your own -- superior results at a fraction of the cost.
That's the way Apple has always done it!
No, it is not a premium brand. It is a cheap brand that gets away with selling low quality headphones at premium prices. Just the opposite of what Apple is all about. A premium brand in this area would be Sennheiser, AKG, Stax, Beyer, B&W etc.... I prefer Stax (I mainly use the SR-009 - probably the best headphones in the world), but I also listen to Sennheiser (HD800 for their exeptional sound stage) and have a set of AKG 701 I use occasionally. On the move I usually use Sennheisers, but also have a set of Bose (for their exceptionally good noise reduction system). Qualitywise Beats are really way, way, way down the ladder. Market share does not make it a premium brand.
It is a premium BRAND, but not a premium product. The BRAND allows them to sell an ordinary product at high prices. The BRAND is doing all the work here, not the product itself. If Apple was really interested in audio quality they would have purchased a company like Grado. They would have given Tomilinson Holman carte blanche to improve the audio hardware in all Apple products to a higher standard. Apple wants what the BRAND has to offer, not specifically the products. Let's face it, almost 100% of headphone buyers out there are uninformed. Accuracy, neutrality, sound stage, linearity, distortion, presence - none of these words mean anything to those buyers. The people who care about such things (like me and you) are in an extreme minority, thus making our wishes irrelevant to companies like Beats and even Apple. There are not enough of us to sell to and thus make any sort of profit for giant companies. It appears to me that any Beats acquisition is mostly a BRAND grab and maybe a software/algorithm grab.
Aren't you in NY? That's quite a bit aways from the Mason-Dixon line.
Have you finished elementary school buddy?
The question is how that brand has been built. Apple was built up by quality and innovation, Coca Cola was built because they had a product nobody else had etc... What has built the brand Beats? They have always sold low quality products - they have nothing that distinguishes them from other producers (apart from selling overpriced junk).
Quote:
I guess it all comes down to how one defines the word premium. For me, in the context of Apple, it means superior quality. For others it might mean expensive, irrespective of quality.
I agree with you that I think Beats are overpriced for what you get, but the masses don't agree with us. It's all subjective. They sell well and people are happy to pay the premium price for what they perceive to be a better quality product. Go out and find people who have spent hundreds of dollars on a pair of Beats headphones and ask them how they feel about them and why they bought them. Obviously there's the design aspect that people like, but I suspect that a vast majority will also be very pleased with the quality of their headphones. I also suspect that a vast majority would agree with someone who said that they have superior quality in relation to other headphones.
IMO they are keeping the Beats brand alive. Selling headphones is one thing but Id like to see them making plastic colorful phones (like the 5c series maybe with a little less functionality) and selling them at the $300 price range. they cant do that right now and market them as "iphone" (that would dilute the brand) but they can surely make them and market them as "beats" with a big red "b" logo smack on the reverse side! thats what I wanna see!
How is Beats perceived as a premium brand? Just because their headphones are expensive? I would argue Beats is perceived as an overpriced brand. I don't get why Apple would want to be associated with that.
As well as the streaming service and Iovine's talent, this deal will give Apple and Jony a smaller boutique brand under the Apple umbrella in which to design cool products but without the stress of it being an "Apple Product" and all the baggage that comes with that. Think of the Beats hardware as a place for Jony and his team to play, take some risks and make some great stuff.
Aren't you in NY? That's quite a bit aways from the Mason-Dixon line.
Yes, I'm a Yankee.
Think of the Beats hardware as a place for Jony and his team to play, take some risks and make some great stuff.
It's a terrible idea, when Jony Ive could just continue making things for the Apple brand, which is much more highly regarded than any Beats brand.
Was wondering when someone would play the old race card. All that pent up rage for Apple coloring all those headphones white I guess. I didn't know that Iovine was black.
LOL. ..
I have ad blocker and never see them, not sure everyone doesn't use it!
its a premium brand.
they have 70% of the consumer premium/high end headphone business.
No, it is not a premium brand. It is a cheap brand that gets away with selling low quality headphones at premium prices. Just the opposite of what Apple is all about. A premium brand in this area would be Sennheiser, AKG, Stax, Beyer, B&W etc.... I prefer Stax (I mainly use the SR-009 - probably the best headphones in the world), but I also listen to Sennheiser (HD800 for their exeptional sound stage) and have a set of AKG 701 I use occasionally. On the move I usually use Sennheisers, but also have a set of Bose (for their exceptionally good noise reduction system). Qualitywise Beats are really way, way, way down the ladder. Market share does not make it a premium brand.
Oh, enough with this silly headphone snobbery. It would be just tiresome if it weren't so laughably off.
With lossy AAC/MP3 files, having a great versus a mediocre headphone just gets you.... mediocre sound, regardless of what you think or say. (As to the bass-heavy critique -- that others have brought up -- just change the equalizer preset and stop the whining).