People can legitimately complain about the strategy, the fit, and the two guys being hired (assuming any of this is true). I have done so myself.
But to suggest that $3.2B is an overvaluation is silly on its face. We have absolutely no idea what Beats's cash flows are.
If the numbers I've seen thrown around are true, this is a solid business business with solid profits. Even leaving synergies aside, a standalone valuation of $3.2 for the company might be more than amply justified.
People can legitimately complain about the strategy, the fit, and the two guys being hired (assuming any of this is true). I have done so myself.
But to suggest that $3.2B is an overvaluation is silly on its face. We have absolutely no idea what Beats's cash flows are.
If the numbers I've seen thrown around are true, this is a solid business business with solid profits. Even leaving synergies aside, a standalone valuation of $3.2 for the company might be more than amply justified.
Yep. We need to have a betting pool for the month and year that the Beats fad expires.
Apple would be buying them at the height of their popularity.
I'm on the same page as this tweet from Ben Thompson:
@monkbent
Apple backing out because Dre celebrated doesn't bother me. Rather, Apple not knowing what they were buying does. Shades of John Browett.
To me that's the most damning thing in this billboard story. And why I hope it doesn't happen. I don't want Apple to buy something because they're feeling pressure to spend their money (in other ways than stock buy backs) or because someone inside/outside the company told them they weren't hip and cool anymore and they think Beats would bring some of that back (shades of iPods and silhouette advertising).
Apple would be buying them at the height of their popularity.
Such arrogance! (Unless, of course, you have some evidence to back up the assertion that they're 'at the height of their popularity', in which case, I apologize in advance).
Yep. We need to have a betting pool for the month and year that the Beats fad expires.
You're probably not being serious, but if this is a real deal with Apple, it needs to be said that they would not be seeing it as anything like a fad, but as a new product category.
Like the iPod, for example, "1000 songs in your pocket." Beats headphones are the first ear appliance that makes audio environments portable and wearable out in the world. Gruber picked up the phrase, "it's like wearing a nightclub on your head" from somewhere.
This is of course done by giving room to the bass at the expense of accuracy, but the Beats market doesn't care about accuracy, it wants atmosphere, portable auditory attitude culture. That could be a vast world market of the rising post-colonial classes, but first, Apple would have to bring down the price of entry models, and maybe make them with on board equalizers to take in the world mix of instruments and voices.
Anyway, if headphones are the new iPod, there are years of market development ahead. All bets would be off in this scenario.
Such arrogance! (Unless, of course, you have some evidence to back up the assertion that they're 'at the height of their popularity', in which case, I apologize in advance).
Ok I don't know that for sure. But Apple certainly isn't buying some up and coming brand that not many people have heard about. Beats is a fad IMO and we know how quickly fads can go out of style.
Yeah, you and the rest of us are likely to have a better handle on this than Apple does.
/s
Tim Cook did hire John Browett. /s
That comment borders on the idiotic. One, he reversed it. Two, and more important, your observation has nothing to with my post, which was (and your response to that too was) specifically about the likely valuation for Beats.
Don't change the premise midway through a conversation.
From what I understand They are buying access .... To the growth demographic ..... To content labels .... To what's now no wait for the us to build
My issue among many that have been mentioned If there is a delay because of "valuation "" Then why the price point pushed of 3.2 B??? Is it worth less or Come now --- MORE??
First of all%u2026 I am not a religious nut and I own a pair of beats headphones, but it kind of bothers me that beats headphones have a 666 on the hinges -- two hexagon shape bolts and the b of beats slightly twisted. Also when you see these headphones promoted the have 3 pairs that display 666. I am hoping that this is just a coincidence or doesn't have any dark intentions. Again%u2026 I hope, but I fear something much sinister is going on. I am looking forward for comments.
It is what it is and consider the people (Dr. Dre specifically) behind the company. Just read the lyrics to the music he creates and produces, that should explain his mentality. Not exactly someone I would allow baby sitting my kids.
What I've read is that the electronics portion of Beats (headphones) makes a decent profit, but the Beats Music (subscription service) is losing money as they were looking for $100 Million more for the Beats Music division, which doesn't surprise me.
If you look at the Net Profits to Gross Revenue for any content subscription, movie rental (NetFlix), Digital Download (Amazon), etc. it's a VERY low profit margin business.
Apple just needs to negotiate deals to offer a subscription service, but I don't think they NEED to at this time. Several reasons why I feel this way.
1. They can't get the entire catalogs from the record distributors to allow for subscription based music downloads as they simply don't let companies offer the entire catalog.
2. No one has proven that it's profitable. Apple's iTunes, is the largest download site and they don't run off of large Net Profit margin, as it's more offered as a convenience (and to help fend off illegal downloads) to Apple iPod customers as that what it was originally designed for. I just think it's more of getting Beats out of the picture instead of Google, Microsoft, etc. from buying them out.
Whether this happens or not, if Apple simply walked away from the deal, it would probably make Beats less valuable and less attractive to someone else buying them out as it would signal lots of questions behind them bailing on the deal.
I wish I had more answers than that, but since Cook & Co. have been tight lipped on it, who knows what the reality is behind this deal. Maybe Cook finally got exposed to things that changes the deal after the YouTube video that Dr. Dre released with his drinking buddies. I'm sure that might have some impact on this since it was prematurely released that the deal was signed and sealed and official. I'm sure that didn't go over well in Cupertino.
Looks like we've got ourselves quite a yawn-fest going on here.
His real name is Andre Young, according to sources close to the matter. AppleInsider cannot confirm or deny this and is merely passing this information along for the purpose of discussion. Highly reliable insider Ming-chi Kuo says a 5.5 inch version of Dr. Dre is coming later this year.
Comments
These comments have a smell like a bowl of cheerios w/ milk that somebody forgot about, and left sitting in the sun all day.
But to suggest that $3.2B is an overvaluation is silly on its face. We have absolutely no idea what Beats's cash flows are.
If the numbers I've seen thrown around are true, this is a solid business business with solid profits. Even leaving synergies aside, a standalone valuation of $3.2 for the company might be more than amply justified.
I get it. The deal is off because Dr. Dre lied on his resume.
You mean he's not really a Doctor?
Looks like we've got ourselves quite a yawn-fest going on here.
Yep. We need to have a betting pool for the month and year that the Beats fad expires.
I'm on the same page as this tweet from Ben Thompson:
To me that's the most damning thing in this billboard story. And why I hope it doesn't happen. I don't want Apple to buy something because they're feeling pressure to spend their money (in other ways than stock buy backs) or because someone inside/outside the company told them they weren't hip and cool anymore and they think Beats would bring some of that back (shades of iPods and silhouette advertising).
What makes you think not?
Yeah, you and the rest of us are likely to have a better handle on this than Apple does.
/s
Such arrogance! (Unless, of course, you have some evidence to back up the assertion that they're 'at the height of their popularity', in which case, I apologize in advance).
You're probably not being serious, but if this is a real deal with Apple, it needs to be said that they would not be seeing it as anything like a fad, but as a new product category.
Like the iPod, for example, "1000 songs in your pocket." Beats headphones are the first ear appliance that makes audio environments portable and wearable out in the world. Gruber picked up the phrase, "it's like wearing a nightclub on your head" from somewhere.
This is of course done by giving room to the bass at the expense of accuracy, but the Beats market doesn't care about accuracy, it wants atmosphere, portable auditory attitude culture. That could be a vast world market of the rising post-colonial classes, but first, Apple would have to bring down the price of entry models, and maybe make them with on board equalizers to take in the world mix of instruments and voices.
Anyway, if headphones are the new iPod, there are years of market development ahead. All bets would be off in this scenario.
That comment borders on the idiotic. One, he reversed it. Two, and more important, your observation has nothing to with my post, which was (and your response to that too was) specifically about the likely valuation for Beats.
Don't change the premise midway through a conversation.
They are buying access
.... To the growth demographic
..... To content labels
.... To what's now no wait for the us to build
My issue among many that have been mentioned
If there is a delay because of "valuation ""
Then why the price point pushed of 3.2 B???
Is it worth less or
Come now --- MORE??
This probably happened if there was a deal http://daringfireball.net/linked/2014/05/23/mcgraw or this http://daringfireball.net/linked/2014/05/23/ati.. Secrecy is always priority.
We have absolutely no clue, unfortunately, since Beats is a privately held company and no data are available.
First of all%u2026 I am not a religious nut and I own a pair of beats headphones, but it kind of bothers me that beats headphones have a 666 on the hinges -- two hexagon shape bolts and the b of beats slightly twisted. Also when you see these headphones promoted the have 3 pairs that display 666. I am hoping that this is just a coincidence or doesn't have any dark intentions. Again%u2026 I hope, but I fear something much sinister is going on. I am looking forward for comments.
It is what it is and consider the people (Dr. Dre specifically) behind the company. Just read the lyrics to the music he creates and produces, that should explain his mentality. Not exactly someone I would allow baby sitting my kids.
And solid future profits?
What I've read is that the electronics portion of Beats (headphones) makes a decent profit, but the Beats Music (subscription service) is losing money as they were looking for $100 Million more for the Beats Music division, which doesn't surprise me.
If you look at the Net Profits to Gross Revenue for any content subscription, movie rental (NetFlix), Digital Download (Amazon), etc. it's a VERY low profit margin business.
Apple just needs to negotiate deals to offer a subscription service, but I don't think they NEED to at this time. Several reasons why I feel this way.
1. They can't get the entire catalogs from the record distributors to allow for subscription based music downloads as they simply don't let companies offer the entire catalog.
2. No one has proven that it's profitable. Apple's iTunes, is the largest download site and they don't run off of large Net Profit margin, as it's more offered as a convenience (and to help fend off illegal downloads) to Apple iPod customers as that what it was originally designed for. I just think it's more of getting Beats out of the picture instead of Google, Microsoft, etc. from buying them out.
Whether this happens or not, if Apple simply walked away from the deal, it would probably make Beats less valuable and less attractive to someone else buying them out as it would signal lots of questions behind them bailing on the deal.
I wish I had more answers than that, but since Cook & Co. have been tight lipped on it, who knows what the reality is behind this deal. Maybe Cook finally got exposed to things that changes the deal after the YouTube video that Dr. Dre released with his drinking buddies. I'm sure that might have some impact on this since it was prematurely released that the deal was signed and sealed and official. I'm sure that didn't go over well in Cupertino.
Let just say this: The Beats deal makes sense if 50% of the deal goes directly to Iovine ($1.6 billion) and it is treated like a hire for Apple.
The other guy is just a bad rap artist that is not worth that kind of money. That is the hold up. Ego.
His real name is Andre Young, according to sources close to the matter. AppleInsider cannot confirm or deny this and is merely passing this information along for the purpose of discussion. Highly reliable insider Ming-chi Kuo says a 5.5 inch version of Dr. Dre is coming later this year.