Well, I admit I wasn't expecting that. And I'm not terribly happy about it, as I don't think it's a sensible buy, whether for the service or the people, and definitely not for the hardware.
Apple do need to innovate and start coming up with new stuff again, blah blah blah the media keeps saying this line and it is quite true. It just takes time...
Tim Cook is playing a game of chess, he is merely positioning his pieces at this point...
Putting Jony Ive in charge of software design as well as hardware, possible plays in health, wearable devices, connected homes and automatization, rumours of some soft of TV device, purchase of the biggest brand in headphones and an upcoming music subscription service.... All the other things everyone speculates on and I am sure many other things people will be blindsided by.
Let's see what play he makes with these pieces before you all judge. It seems to me Apple is getting ready for the next big things. You have had the computers, iPod's, iTunes, iPhones and iPads... now the next likely more explosive chapter is about to begin.
With this purchase I am also very curious as to what will happen to the Beats brand, future products etc...
Assumedly nothing will change with the Beats brand and they will continue to be featured and sold in Apple Stores.
Well, I admit I wasn't expecting that. And I'm not terribly happy about it, as I don't think it's a sensible buy, whether for the service or the people, and definitely not for the hardware.
You see, it makes sense from an accounting perspective... which is why Apple has not done deals like this before. It sure looks like a bean counter's decision (in other words, Wall Street will love it, but it goes against the philosophy of a company that prizes quality and design over razzle-dazzle design flourishes).
If this is Apple's strategy for growth going forward, will they basically buy up all of the high-end and currently popular accessories companies that make add-ons for Apple products?
Will they hire CEOs from Warner Bros., Paramount Pictures, Universal Studios to build out a filmed entertainment division? Why not buy Disney next?
Don't be silly. Apple is buying an extremely popular brand to prop up their music business. It's a great buy because they're such a focused company - everything is about music.
You just hate Dr Dre huh? They bought an extremely successful company for basically nothing. It's revenue covers the cost in two years. They get so much more from streaming to gaining access to the only malarkey in the US that shuns Apple and thinks Samsung is innovative. The urban market. And trust me, this is not dominated by African Americans. The hip hip culture is wider than you think it is.
Apple probably lost the "urban market" by not having big phones. But who cares? It's not a rich market nor is it important outside the US where apple are floundering.
Assumedly nothing will change with the Beats brand and they will continue to be featured and sold in Apple Stores.
For the time being yes... long term who knows... this is an interesting position for Apple. Will they just oversee the brand and allow it to create it's own profits etc to help pay back the 3 billion it spent and milk it for whatever assets it felt where worth the price tag, likely meaning whatever those assets where won't actually cost it that much at all, if indeed anything.
Why not. Stylish popular designs that actually sell and make a high margin, a streaming service that actually has the best curation system in the market, and two music industry giants on board for all your music initiative from promotions to negotiations, to insight on pop and urban culture, to music production. Add to that the fact that if having Apple's marketing and design behind them doesn't increase revenue at all it would still pay for itself in two years since they did 1.5 billion last year before getting into streaming. Sounds like a great move. It also lets Cook focus on other things now that there will be a entertainment chief with connections rivaling Jobs and he no longer has to run retail himself.
Because Apple either already has all that or can get it fore much less.
Apple already has the most valuable brand in the world. They already make high quality high margin electronics that sell in high volume. They already have the largest music store in existence which puts them in a good position to negotiate with the record labels on their terms.
When I look at recent acquisitions in the tech industry I see Apples competitors spending billions on seemingly random companies while Apple has been spending mere millions augmenting itself with unique talent and cutting edge tech. Now all the sudden they are spending billions on a company, and I'm not seeing the potential that I do with the other acquisitions they have made at less than 1/10th the price.
What are you talking about? Apple never dictated download pricing after they were big, the 99 cents price was set from the get go. Furthermore, it was the music industry that strong-armed Apple into the tiered pricing they have now by forcing them to remain DRM while letting others remove it, until Apple capitulated.
The industry always wanted variable pricing. Apple was an impediment to that.
I've always laughed at that "argument" as well. As if Apple doesn't have music industry connections. As if Apple didn't revolutionize the music industry as we know it.
They can get Iovine for his smarts and ingenuity. Dre for his "coolness" and marketability (particularly with athletes). But let's not fool ourselves and say it's because of their connections in the music industry. That's ignorant.
Assumedly nothing will change with the Beats brand and they will continue to be featured and sold in Apple Stores.
However, now we'll see cross-promotion of Apple products in Beats commercials. This will resonate within the youth market. This is an extremely smart marketing play.
How much did Samsung spend on marketing last year?
I get the feeling this is like any other company that twists their numbers to look one way, and years later gets sued because they hid this that and the other.
Not really. The music industry learned a valuable lesson. They gave the Apple the car keys and look what happened. Apple was able to grow to the point where they dictated terms like download pricing and other things. They are now more wary about just giving Apple what it wants. Iovine lends far more credibility than Eddie Cue. Not because of a deficiency of Cue but rather Iovine does it all day every day.
So the industry is just going to forget that Iovine works for Apple?
Notice they are keeping the Beats branding intact. So the engineering is not what Apple was after. If it were, they would have bought a boutique audiophile firm and dropped its branding, relabeled product with apple branding and called it a day.
And for all we know, they may still buy up high end audio firms and brand the acquired wares with Beats branding. He'll, Apple may already own patents that could immediately improve Beats product line.
Well it would have been stupid to pay $3B for Beats and not keep the brand since that's basically what you're paying for. I did notice in the press release that neither Tim Cook nor Eddy Cue said anything about hardware. So that leads me to believe Apple probably won't touch the headphones. They'll just happily collect the profits.
Because Apple either already has all that or can get it fore much less.
Apple already has the most valuable brand in the world. They already make high quality high margin electronics that sell in high volume. They already have the largest music store in existence which puts them in a good position to negotiate with the record labels on their terms.
When I look at recent acquisitions in the tech industry I see Apples competitors spending billions on seemingly random companies while Apple has been spending mere millions augmenting itself with unique talent and cutting edge tech. Now all the sudden they are spending billions on a company, and I'm not seeing the potential that I do with the other acquisitions they have made at less than 1/10th the price.
The industry always wanted variable pricing. Apple was an impediment to that.
Yes, that was the original deal and that had nothing to do with Apple being so big in the music industry - they hadn't even started selling music at that point. The labels wanted to renegotiate and Steve told them no.
Comments
Apple do need to innovate and start coming up with new stuff again, blah blah blah the media keeps saying this line and it is quite true. It just takes time...
Tim Cook is playing a game of chess, he is merely positioning his pieces at this point...
Putting Jony Ive in charge of software design as well as hardware, possible plays in health, wearable devices, connected homes and automatization, rumours of some soft of TV device, purchase of the biggest brand in headphones and an upcoming music subscription service.... All the other things everyone speculates on and I am sure many other things people will be blindsided by.
Let's see what play he makes with these pieces before you all judge. It seems to me Apple is getting ready for the next big things. You have had the computers, iPod's, iTunes, iPhones and iPads... now the next likely more explosive chapter is about to begin.
With this purchase I am also very curious as to what will happen to the Beats brand, future products etc...
Assumedly nothing will change with the Beats brand and they will continue to be featured and sold in Apple Stores.
Well, I admit I wasn't expecting that. And I'm not terribly happy about it, as I don't think it's a sensible buy, whether for the service or the people, and definitely not for the hardware.
You see, it makes sense from an accounting perspective... which is why Apple has not done deals like this before. It sure looks like a bean counter's decision (in other words, Wall Street will love it, but it goes against the philosophy of a company that prizes quality and design over razzle-dazzle design flourishes).
I'd sure like to hear Jony Ive's take on this.
The best is yet to come.
Now go buy your Beats subscription already.
If this is Apple's strategy for growth going forward, will they basically buy up all of the high-end and currently popular accessories companies that make add-ons for Apple products?
Will they hire CEOs from Warner Bros., Paramount Pictures, Universal Studios to build out a filmed entertainment division? Why not buy Disney next?
Don't be silly. Apple is buying an extremely popular brand to prop up their music business. It's a great buy because they're such a focused company - everything is about music.
Apple probably lost the "urban market" by not having big phones. But who cares? It's not a rich market nor is it important outside the US where apple are floundering.
In all seriousness, I'm looking forward to seeing where this goes. Sometimes the best plays are the least expected.
Assumedly nothing will change with the Beats brand and they will continue to be featured and sold in Apple Stores.
For the time being yes... long term who knows... this is an interesting position for Apple. Will they just oversee the brand and allow it to create it's own profits etc to help pay back the 3 billion it spent and milk it for whatever assets it felt where worth the price tag, likely meaning whatever those assets where won't actually cost it that much at all, if indeed anything.
Because Apple either already has all that or can get it fore much less.
Apple already has the most valuable brand in the world. They already make high quality high margin electronics that sell in high volume. They already have the largest music store in existence which puts them in a good position to negotiate with the record labels on their terms.
When I look at recent acquisitions in the tech industry I see Apples competitors spending billions on seemingly random companies while Apple has been spending mere millions augmenting itself with unique talent and cutting edge tech. Now all the sudden they are spending billions on a company, and I'm not seeing the potential that I do with the other acquisitions they have made at less than 1/10th the price.
What are you talking about? Apple never dictated download pricing after they were big, the 99 cents price was set from the get go. Furthermore, it was the music industry that strong-armed Apple into the tiered pricing they have now by forcing them to remain DRM while letting others remove it, until Apple capitulated.
The industry always wanted variable pricing. Apple was an impediment to that.
Everybody knew it was going to happen, unless due diligence failed that was a given. Apple would have denied a rumour like this way before now.
Also it has to happen before WWDC to make the announcement there. Let's see what happens next week though I bet we get no real info.
Assumedly nothing will change with the Beats brand and they will continue to be featured and sold in Apple Stores.
However, now we'll see cross-promotion of Apple products in Beats commercials. This will resonate within the youth market. This is an extremely smart marketing play.
How much did Samsung spend on marketing last year?
Not really. The music industry learned a valuable lesson. They gave the Apple the car keys and look what happened. Apple was able to grow to the point where they dictated terms like download pricing and other things. They are now more wary about just giving Apple what it wants. Iovine lends far more credibility than Eddie Cue. Not because of a deficiency of Cue but rather Iovine does it all day every day.
So the industry is just going to forget that Iovine works for Apple?
Any if that is still Apples policy why would Iovine convince content providers to go against their perceived interests?
It's called cronyism- Hollywood style.
The industry always wanted variable pricing. Apple was an impediment to that.
Yes, that was the original deal and that had nothing to do with Apple being so big in the music industry - they hadn't even started selling music at that point. The labels wanted to renegotiate and Steve told them no.