If it happens Apple will have bought a profitable company for three billion dollars which is about two times earnings, usually that is a good deal, certainly better than buying Nest, Twitter, Netflix, Whatsapp, or Instagram all of which make/made little to no profit at all despite their big price tags.
Only Apple can be DOOMED for buying a apparently profitable company?
Last time I checked Apple knows how to make a profit. And they buy lots of small companies that are probably not that profitable; they buy them for the technology, not for the brand. Last night at the Code conference you has Microsoft showing off real time translation via Skype (which looked very cool). That's the kind of stuff I want to see from Apple. Let's get real time translation for FaceTime. This is stuff that makes you go "wow". There is nothing about Beats that makes me go "wow".
I quite imagine, but for the fact that this is loose change to Apple, negative publicity would have had them pull out of the deal. 3.2 down to 3 is a very very minor revision.
What Beats did was get the average Joe to question the quality of the headphones that came in the box and pull out their wallets to pay for something better.
Not audiophiles who whine about the meaningless to most specs of xyz brand.
Ordinary people who never would have thought of laying down a couple of hundred on headphones to improve their listening before Beats came on the scene.
The guys are smart and they've built a multi-billion dollar business.
An injection of new blood might be just what Apple needs, in spite of the undercurrent of attempted hidden racism that colours most of the whiner's posts.
What Beats did was get the average Joe to question the quality of the headphones that came in the box and pull out their wallets to pay for something better.
Not audiophiles who whine about the meaningless to most specs of xyz brand.
Ordinary people who never would have thought of laying down a couple of hundred on headphones to improve their listening before Beats came on the scene.
The guys are smart and they've built a multi-billion dollar business.
An injection of new blood might be just what Apple needs, in spite of the undercurrent of attempted hidden racism that colours most of the whiner's posts.
I totally agree. People may whine that Beats are all about marketing and not a great fit for Apple. However, I'd like to thank them. Most bundled earphones (and Apple's earphones are especially guilty of this) leak sound like crazy. Beats' headphones do not. Each Beats owner is one less person on the subway whose music I can hear over my own.
What Beats did was get the average Joe to question the quality of the headphones that came in the box and pull out their wallets to pay for something better.
Not audiophiles who whine about the meaningless to most specs of xyz brand.
Ordinary people who never would have thought of laying down a couple of hundred on headphones to improve their listening before Beats came on the scene.
The guys are smart and they've built a multi-billion dollar business.
An injection of new blood might be just what Apple needs, in spite of the undercurrent of attempted hidden racism that colours most of the whiner's posts.
That's nice, throwing out the race card. :rolleyes: What new blood exactly does Apple need and what for?
That part of the "story" doesn't strike you as odd? It's hard for me to imagine that any company, much less Apple, would make an offer for a company that they haven't looked into.
Due diligence is an expensive undertaking for both companies. They will usually have an agreement based on an understanding of what they will find. Dre and company leaking the deal before due diligence happens shows they have never done anything like this before. The author that assumed they uncovered "unsettling" information has apparently never covered anything like this before. Deals almost always change during due diligence. Sellers try to put their best face forward. When someone is buying a house they make an offer. After the offer, they have the house inspected. They buyer nearly always asks for some kind of concession after the inspection. It doesn't mean the buyer found anything unsettling, it just means the buyer found an angle they can leverage to get a better deal.
Beats already has $1.3 Billion in sales a year and GROWING.
The price was only 230% of yearly sales. That's an outstanding price for a growing company.
Guessing neither of you have ever bought a company- Revenue means little when you look at buying a business or determining a value. Ebitda and synergies do. There are essentially no synergies, and If their revenue is 1.3bil and they profit 130 mil, it's not a good deal. Of course- We don't know their profit as they're a private company. We don't have the numbers, so we can't determine a valuation.
As a side note- I will gladly sell my company for 230% of gross revenue. You bring the check, I'll bring the keys!
That part of the "story" doesn't strike you as odd? It's hard for me to imagine that any company, much less Apple, would make an offer for a company that they haven't looked into.
It was a cronyism agreement not yet approved by the board and Dr Dre and the hip hoppers leaked it?
Meanwhile the first Apple Beats commercial featuring Snoop Dogg being filmed as we speak according to NYPOST
Spring will be huge for celebrity endorsements for sales. Snoop can be in a commercial aired April 20th, and Eminem can be in a special ad aired for Mother's Day.
This fool, along with many other trolls, jumped on the fact that there are some legitimate doubts about this deal to endlessly, and prematurely criticize Tim and Apple. BTW, how did the term "haters" come into popular use?
Anyway, amongst the legitimate questions posed, most of the opposition to this deal has been little more than foot stamping. After the initial shock of the deal, buying Beats makes a lot of sense. For one, Apple has given no indications that it makes bad acquisitions, but for the doubting Thomas's out there:
1) There is very little financial risk, with $1.3B and growing revenue in 2013, Ireland tax breaks, and now the price is reduced by $0.2B.
2) Dealing with musicians is not in Apple's core competency. The potential for an iTunes music label is huge; the popularity and growth of iTunes festival is the tip of the iceberg. Even the threat of a label can give Apple huge leverage on negotiations with labels, particularly if Apple is trying to get a streaming service off the ground.
3) Curation and music AI. Curation is also not a core Apple competency, as can be seen with the stale state of iTunes, a huge inconsistency for a company that is so amazing at intersecting humanities with technology in consumer electronics. It seems Beats has a great creative team of over 150 people in charge of Beats Music, led by Iovine, Dre, and Trent Reznor. Algorithms are not enough, just like with Siri, the key is to combine algorithms and human curation.
4) There is a lot of appeal to Beats headphones, which are reportedly attuned to mimicking the experience of live music, not perfectly accurate music reproduction (as Dick Applebaum discussed in a previous thread). This is the experience that the majority of consumers are looking for.
Apple should strive to be the clear leader in music. More and more music is being commoditized and consumed for free, the trend is clear. Radio apps, soundcloud, and youtube are providing viable alternatives to buying music. Apple should do more than just present songs in iTunes as a utility. Music curation allows Apple to provide compelling value over algorithms and free streaming. Apple is once again in the position to save the music industry from itself.
That is a good point. However, google and spotify pay out royalties. However, having iTunes sponsored albums or Beats music label or something sounds interesting. I don't quite understand the logic here but you make some very good points. Apple's core competency isn't within the music/entertainment industry itself.
Beats already has $1.3 Billion in sales a year and GROWING.
The price was only 230% of yearly sales. That's an outstanding price for a growing company.
Problem is the people in this forum have no VISION and don't understand how powerful a brand Beats is in the urban culture.
So do you think Apple will maintain the Beats brand? If not, then all the power of the brand is worthless. If they do, then that would be very out of the norm for Apple (the only similar thing I can think of is Filemaker, and that did not turn out too well for them) and considering Apple is already making billions a year, would b strange to see them acquire a company for its profits.
The whole acquisition makes very little sense to me. The only way it works, IMO, is if the music rights are transferable. If not, the acquisition actually destroys value, as far as I can tell, by causing the forfeiture of the music rights.
Comments
3.2 down to 3 is a very very minor revision.
What Beats did was get the average Joe to question the quality of the headphones that came in the box and pull out their wallets to pay for something better.
Not audiophiles who whine about the meaningless to most specs of xyz brand.
Ordinary people who never would have thought of laying down a couple of hundred on headphones to improve their listening before Beats came on the scene.
The guys are smart and they've built a multi-billion dollar business.
An injection of new blood might be just what Apple needs, in spite of the undercurrent of attempted hidden racism that colours most of the whiner's posts.
What Beats did was get the average Joe to question the quality of the headphones that came in the box and pull out their wallets to pay for something better.
Not audiophiles who whine about the meaningless to most specs of xyz brand.
Ordinary people who never would have thought of laying down a couple of hundred on headphones to improve their listening before Beats came on the scene.
The guys are smart and they've built a multi-billion dollar business.
An injection of new blood might be just what Apple needs, in spite of the undercurrent of attempted hidden racism that colours most of the whiner's posts.
I totally agree. People may whine that Beats are all about marketing and not a great fit for Apple. However, I'd like to thank them. Most bundled earphones (and Apple's earphones are especially guilty of this) leak sound like crazy. Beats' headphones do not. Each Beats owner is one less person on the subway whose music I can hear over my own.
Due diligence is an expensive undertaking for both companies. They will usually have an agreement based on an understanding of what they will find. Dre and company leaking the deal before due diligence happens shows they have never done anything like this before. The author that assumed they uncovered "unsettling" information has apparently never covered anything like this before. Deals almost always change during due diligence. Sellers try to put their best face forward. When someone is buying a house they make an offer. After the offer, they have the house inspected. They buyer nearly always asks for some kind of concession after the inspection. It doesn't mean the buyer found anything unsettling, it just means the buyer found an angle they can leverage to get a better deal.
That's nice, throwing out the race card.
To make all the people whining about Tim Cook and his presentation skills shut up and go away.
If Dr Dre was white do you think there would be as much thinly veiled disgust?
If half the posters here had your courage, this would be a much shorter thread.
As a side note- I will gladly sell my company for 230% of gross revenue. You bring the check, I'll bring the keys!
It was a cronyism agreement not yet approved by the board and Dr Dre and the hip hoppers leaked it?
The first Apple Beats commercial featuring Snoop Dogg being filmed as we speak according to NYPOST
Never mind...
Spring will be huge for celebrity endorsements for sales. Snoop can be in a commercial aired April 20th, and Eminem can be in a special ad aired for Mother's Day.
FOOLS!
If Tim Cook were black you'd be labeled a racist according to your standards. Instead, I'll just call you a homophobe.
I'm not whining about Tim Cook's performance and never have.
There have been plenty of people defending this supposed deal, claiming that it's not about the headphones, it's about the streaming service.
And the article in the OP is saying the exact opposite of that.
" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />
You are surprising me... I was expecting to read something different from you. LOL!
Well, not all..
This fool, along with many other trolls, jumped on the fact that there are some legitimate doubts about this deal to endlessly, and prematurely criticize Tim and Apple. BTW, how did the term "haters" come into popular use?
Anyway, amongst the legitimate questions posed, most of the opposition to this deal has been little more than foot stamping. After the initial shock of the deal, buying Beats makes a lot of sense. For one, Apple has given no indications that it makes bad acquisitions, but for the doubting Thomas's out there:
1) There is very little financial risk, with $1.3B and growing revenue in 2013, Ireland tax breaks, and now the price is reduced by $0.2B.
2) Dealing with musicians is not in Apple's core competency. The potential for an iTunes music label is huge; the popularity and growth of iTunes festival is the tip of the iceberg. Even the threat of a label can give Apple huge leverage on negotiations with labels, particularly if Apple is trying to get a streaming service off the ground.
3) Curation and music AI. Curation is also not a core Apple competency, as can be seen with the stale state of iTunes, a huge inconsistency for a company that is so amazing at intersecting humanities with technology in consumer electronics. It seems Beats has a great creative team of over 150 people in charge of Beats Music, led by Iovine, Dre, and Trent Reznor. Algorithms are not enough, just like with Siri, the key is to combine algorithms and human curation.
4) There is a lot of appeal to Beats headphones, which are reportedly attuned to mimicking the experience of live music, not perfectly accurate music reproduction (as Dick Applebaum discussed in a previous thread). This is the experience that the majority of consumers are looking for.
Apple should strive to be the clear leader in music. More and more music is being commoditized and consumed for free, the trend is clear. Radio apps, soundcloud, and youtube are providing viable alternatives to buying music. Apple should do more than just present songs in iTunes as a utility. Music curation allows Apple to provide compelling value over algorithms and free streaming. Apple is once again in the position to save the music industry from itself.
That is a good point. However, google and spotify pay out royalties. However, having iTunes sponsored albums or Beats music label or something sounds interesting. I don't quite understand the logic here but you make some very good points. Apple's core competency isn't within the music/entertainment industry itself.
Great news.
Beats already has $1.3 Billion in sales a year and GROWING.
The price was only 230% of yearly sales. That's an outstanding price for a growing company.
Problem is the people in this forum have no VISION and don't understand how powerful a brand Beats is in the urban culture.
So do you think Apple will maintain the Beats brand? If not, then all the power of the brand is worthless. If they do, then that would be very out of the norm for Apple (the only similar thing I can think of is Filemaker, and that did not turn out too well for them) and considering Apple is already making billions a year, would b strange to see them acquire a company for its profits.
The whole acquisition makes very little sense to me. The only way it works, IMO, is if the music rights are transferable. If not, the acquisition actually destroys value, as far as I can tell, by causing the forfeiture of the music rights.