Apple probably knows *exactly* how that $3 billion purchase will translate into many more billions.
It doesn't even matter if Cooks "knows". It doesn't even matter if the whole thing fails. This is pocket change. Play money. The only thing that can get hurt is Apple's ego.
I guess Tim believes that he can use Beats streaming service to eventually bankrupt Spotify and have Beats headphones pay for the whole show.
Beats is worth much more than Spotify. Spotify is nothing but an algorithm and a user base, and has little to differentiate itself from other services that offer the same. Beats is the only service that offers a true music AI, human curation and algorithm combined. I think Beats Music was actually just a proof of concept, and that Apple wanted to obtain before it got too many subscribers.
If Apple wants a differentiated streaming service as part of the iTunes ecosystem, as well as a true music AI for Siri, Beats is the clear choice.
This is the biggest acquisition in Apple's history. Terrible. Just terrible. Still hoping that this makes more sense in its execution, in other words, that the way Apple leverages this acquisition makes sense of it. Time will only tell.
Apple needs to get back to being the Apple that made it the success that it is. Buying a company that (mostly) produces overpriced/subpar products is not the way. $89 Grados are exponentially better than anything sold by Beats. Subscription service? Why not buy Spotify then? ^^^ Regardless of what Spotify is or is not, its purchase makes much more sense.
Even more comical is Cook saying that iTunes IS at the forefront of digital music. WTF? It was but it certainly isn't anymore. Not with Spotify, Pandora, YouTube, etc.
Hard to compare Spotify, Pandora, and YouTube to iTunes. Two are music streaming sites, one is videos. iTunes is the number one seller of digital music in the world. The 3 you mentioned don't sell music or movies like iTunes.
Beats is worth much more than Spotify. Spotify is nothing but an algorithm and a user base, and has little to differentiate itself from other services that offer the same. Beats is the only service that offers a true music AI, human curation and algorithm combined. I think Beats Music was actually just a proof of concept, and that Apple wanted to obtain before it got too many subscribers.
If Apple wants a differentiated streaming service as part of the iTunes ecosystem, as well as a true music AI for Siri, Beats is the clear choice.
Says you, but not the investment community.
... but that wasn't the gist of my comment in the first place.
Hard to compare Spotify, Pandora, and YouTube to iTunes. Two are music streaming sites, one is videos. iTunes is the number one seller of digital music in the world. The 3 you mentioned don't sell music or movies like iTunes.
But iTunes sales are declining, so I wouldn't consider it on the forefront of anything.
Even more comical is Cook saying that iTunes IS at the forefront of digital music. WTF? It was but it certainly isn't anymore. Not with Spotify, Pandora, YouTube, etc.
Uh, subscription services are not new nor are they at the forefront of digital music. Spotify and Pandora might be popular and all over the news recently, but they are still extremely small time compared to iTunes. Their popularity has mainly grown because of Android devices - whose users don't buy anything, but would rather get it for free.
Don't get me wrong, I like those services, but please, nothing out there can completely match everything iTunes offers.
But iTunes sales are declining, so I wouldn't consider it on the forefront of anything.
Please show where sales of iTunes is declining... Everything I see shows that the overall digital music market is declining, but nothing singles out iTunes. There are charts showing that iTunes spending per user account has declined, but considering Apple added 200 million accounts in at the last twelve months, that was almost inevitable - more people are buying iPhones and iPads for Apps not music purchases.
Uh, subscription services are not new nor are they at the forefront of digital music. Spotify and Pandora might be popular and all over the news recently, but they are still extremely small time compared to iTunes. Their popularity has mainly grown because of Android devices - whose users don't buy anything, but would rather get it for free.
Don't get me wrong, I like those services, but please, nothing out there can completely match everything iTunes offers.
Er, I use Spotify and it sure ain't free. No lots of people want to be able to stream whatever they want whenever they want which you cannot do with iTunes. It has nothing to do with wanting things for free. The iTunes model of owning music is not at the forefront of anything. If it was Apple wouldn't be spending $3B on Beats!
But iTunes sales are declining, so I wouldn't consider it on the forefront of anything.
iTunes can decline for a very long time and still be out in front of all other services. iTunes is the largest, most profitable music service on the planet. You trying to say Spotify is beating iTunes in sales is not just ridiculous, but fucking ridiculous.
Couldn't Apple have hired someone for $3Bil to fix iTunes - the resource intensive hog that it is?
Every time I read comments like these I don't think I understand. How exactly is itunes "resource intensive"? I have a Mac mini that I use extensively as a home media center serving content to three Apple TV's and five airport express units connected to speakers all over the house. I've never seen itunes use up more than a couple of percent of system resources while doing so on a Mac mini according to Activity Monitor. Granted it's the i7 version and probably over purchased for the task, but still. I do however wish it supported 4k.
So which resources does it use so intensively? Honestly I don't get it, but I see people post this all the time.
Is your version of itunes doing something that mine doesn't? I use it constantly and can't think of a better program.
Streaming music services are declining? Getting music via YouTube is declining?
Streaming sites and iTunes are two different things. Like I said earlier, you can't compare the two. iTunes is digital sales. Pandora, YouTube, and Spotify aren't.
I read the headphones part of the business makes $1 billion a year so the investment should pay for itself in three years just through headphones sales. So it's not like they are throwing money to the wind AT ALL.
People who complain about the Beats headphones quality (myself somewhat included and I don't own a pair) miss the point that it meets a lot of people's needs in totality (look and feel as well as sound), more than previously available headphones were meeting people's needs.
There is no reason why they can't make different versions of the headphones in the future that sound different and please different audiences as long as those audiences are big enough.
Jimmy and Dre are obviously not programmers but if you've read interviews with Jimmy, you know he is full of ideas about how to improve the process of delivering to listeners a song that they want to hear without them having to hunt for it. The Beats streaming service already allows you to create more specifically tailored radio stations than Pandora or iTunes or other services, and it should only get better.
And then around that he and his team can potentially do a lot more with music events, marketing, discovering and promoting new acts, etc., using Apple to some of the hard work that labels used to do to find, promote and make new musical acts.
It's also possible that Jimmy can do more to get more video content (musical and otherwise) available through Apple.
The industry as a whole is declining, but iTunes is still number one.
And music sales will continue to decline. It's just a function of a massive shift in demographics the entire world is going through. More older folks, fewer young folks.
I read the headphones part of the business makes $1 billion a year so the investment should pay for itself in three years just through headphones sales.
1) I had read they had down $1.4 billion in revenue and $300 million in profits in 2013.
2) Since Apple is paying with profits we need to factor in only profits for Apple to reach a break-even point. At a steady $300 million per year that's 10 years. However, Apple will also continually evaluate the valuation of the company and will have made projections on how the revenue and profits will grow as well as how they help push that along. With the rumoured information $3 billion is not an outrageous price, especially when considering the failing Motorola, slight profits of Nest, untested Oculus, and I have no idea what WhatsApp was making to warrant a $19 billion price tag.
1) I had read they had down $1.4 billion in revenue and $300 million in profits in 2013.
2) Since Apple is paying with profits we need to factor in only profits for Apple to reach a break-even point. At a steady $300 million per year that's 10 years. However, Apple will also continually evaluate the valuation of the company and will have made projections on how the revenue and profits will grow as well as how they help push that along. With the rumoured information $3 billion is not an outrageous price, especially when considering the failing Motorola, slight profits of Nest, untested Oculus, and I have no idea what WhatsApp was making to warrant a $19 billion price tag.
These are all excellent points. If this turns out to be the absolute worst purchase in Apple history, at least the damage won't even approach those Google or Facebook purchases.
Er, I use Spotify and it sure ain't free. No lots of people want to be able to stream whatever they want whenever they want which you cannot do with iTunes. It has nothing to do with wanting things for free. The iTunes model of owning music is not at the forefront of anything. If it was Apple wouldn't be spending $3B on Beats!
Spotify is free... in fact 75% of the users aren't paying to use it. Pandora which is much larger than Spotify is also free.
Comments
Apple probably knows *exactly* how that $3 billion purchase will translate into many more billions.
It doesn't even matter if Cooks "knows". It doesn't even matter if the whole thing fails. This is pocket change. Play money. The only thing that can get hurt is Apple's ego.
I'm sure Spotify would have asked for twice that.
I guess Tim believes that he can use Beats streaming service to eventually bankrupt Spotify and have Beats headphones pay for the whole show.
Beats is worth much more than Spotify. Spotify is nothing but an algorithm and a user base, and has little to differentiate itself from other services that offer the same. Beats is the only service that offers a true music AI, human curation and algorithm combined. I think Beats Music was actually just a proof of concept, and that Apple wanted to obtain before it got too many subscribers.
If Apple wants a differentiated streaming service as part of the iTunes ecosystem, as well as a true music AI for Siri, Beats is the clear choice.
This is the biggest acquisition in Apple's history. Terrible. Just terrible. Still hoping that this makes more sense in its execution, in other words, that the way Apple leverages this acquisition makes sense of it. Time will only tell.
Apple needs to get back to being the Apple that made it the success that it is. Buying a company that (mostly) produces overpriced/subpar products is not the way. $89 Grados are exponentially better than anything sold by Beats. Subscription service? Why not buy Spotify then? ^^^ Regardless of what Spotify is or is not, its purchase makes much more sense.
Info on Beats site:
http://www.beatsbydre.com/on/demandware.store/Sites-beats-Site/default/NewsAndPressRelease-ShowArticleContent?articleID=2014_Apple_Acquire_Beats_Music_And_Beats&fdid=news-press-release
I would imagine this quote would give him heartburn:
http://recode.net/2014/05/28/tim-cook-explains-why-apple-is-buying-beats-qa/
Even more comical is Cook saying that iTunes IS at the forefront of digital music. WTF? It was but it certainly isn't anymore. Not with Spotify, Pandora, YouTube, etc.
Hard to compare Spotify, Pandora, and YouTube to iTunes. Two are music streaming sites, one is videos. iTunes is the number one seller of digital music in the world. The 3 you mentioned don't sell music or movies like iTunes.
Beats is worth much more than Spotify. Spotify is nothing but an algorithm and a user base, and has little to differentiate itself from other services that offer the same. Beats is the only service that offers a true music AI, human curation and algorithm combined. I think Beats Music was actually just a proof of concept, and that Apple wanted to obtain before it got too many subscribers.
If Apple wants a differentiated streaming service as part of the iTunes ecosystem, as well as a true music AI for Siri, Beats is the clear choice.
Says you, but not the investment community.
... but that wasn't the gist of my comment in the first place.
But iTunes sales are declining, so I wouldn't consider it on the forefront of anything.
The industry as a whole is declining, but iTunes is still number one.
Even more comical is Cook saying that iTunes IS at the forefront of digital music. WTF? It was but it certainly isn't anymore. Not with Spotify, Pandora, YouTube, etc.
Uh, subscription services are not new nor are they at the forefront of digital music. Spotify and Pandora might be popular and all over the news recently, but they are still extremely small time compared to iTunes. Their popularity has mainly grown because of Android devices - whose users don't buy anything, but would rather get it for free.
Don't get me wrong, I like those services, but please, nothing out there can completely match everything iTunes offers.
But iTunes sales are declining, so I wouldn't consider it on the forefront of anything.
Please show where sales of iTunes is declining... Everything I see shows that the overall digital music market is declining, but nothing singles out iTunes. There are charts showing that iTunes spending per user account has declined, but considering Apple added 200 million accounts in at the last twelve months, that was almost inevitable - more people are buying iPhones and iPads for Apps not music purchases.
iTunes can decline for a very long time and still be out in front of all other services. iTunes is the largest, most profitable music service on the planet. You trying to say Spotify is beating iTunes in sales is not just ridiculous, but fucking ridiculous.
Every time I read comments like these I don't think I understand. How exactly is itunes "resource intensive"? I have a Mac mini that I use extensively as a home media center serving content to three Apple TV's and five airport express units connected to speakers all over the house. I've never seen itunes use up more than a couple of percent of system resources while doing so on a Mac mini according to Activity Monitor. Granted it's the i7 version and probably over purchased for the task, but still. I do however wish it supported 4k.
So which resources does it use so intensively? Honestly I don't get it, but I see people post this all the time.
Is your version of itunes doing something that mine doesn't? I use it constantly and can't think of a better program.
Streaming music services are declining? Getting music via YouTube is declining?
Streaming sites and iTunes are two different things. Like I said earlier, you can't compare the two. iTunes is digital sales. Pandora, YouTube, and Spotify aren't.
People who complain about the Beats headphones quality (myself somewhat included and I don't own a pair) miss the point that it meets a lot of people's needs in totality (look and feel as well as sound), more than previously available headphones were meeting people's needs.
There is no reason why they can't make different versions of the headphones in the future that sound different and please different audiences as long as those audiences are big enough.
Jimmy and Dre are obviously not programmers but if you've read interviews with Jimmy, you know he is full of ideas about how to improve the process of delivering to listeners a song that they want to hear without them having to hunt for it. The Beats streaming service already allows you to create more specifically tailored radio stations than Pandora or iTunes or other services, and it should only get better.
And then around that he and his team can potentially do a lot more with music events, marketing, discovering and promoting new acts, etc., using Apple to some of the hard work that labels used to do to find, promote and make new musical acts.
It's also possible that Jimmy can do more to get more video content (musical and otherwise) available through Apple.
The industry as a whole is declining, but iTunes is still number one.
And music sales will continue to decline. It's just a function of a massive shift in demographics the entire world is going through. More older folks, fewer young folks.
1) I had read they had down $1.4 billion in revenue and $300 million in profits in 2013.
2) Since Apple is paying with profits we need to factor in only profits for Apple to reach a break-even point. At a steady $300 million per year that's 10 years. However, Apple will also continually evaluate the valuation of the company and will have made projections on how the revenue and profits will grow as well as how they help push that along. With the rumoured information $3 billion is not an outrageous price, especially when considering the failing Motorola, slight profits of Nest, untested Oculus, and I have no idea what WhatsApp was making to warrant a $19 billion price tag.
1) I had read they had down $1.4 billion in revenue and $300 million in profits in 2013.
2) Since Apple is paying with profits we need to factor in only profits for Apple to reach a break-even point. At a steady $300 million per year that's 10 years. However, Apple will also continually evaluate the valuation of the company and will have made projections on how the revenue and profits will grow as well as how they help push that along. With the rumoured information $3 billion is not an outrageous price, especially when considering the failing Motorola, slight profits of Nest, untested Oculus, and I have no idea what WhatsApp was making to warrant a $19 billion price tag.
These are all excellent points. If this turns out to be the absolute worst purchase in Apple history, at least the damage won't even approach those Google or Facebook purchases.
Er, I use Spotify and it sure ain't free. No lots of people want to be able to stream whatever they want whenever they want which you cannot do with iTunes. It has nothing to do with wanting things for free. The iTunes model of owning music is not at the forefront of anything. If it was Apple wouldn't be spending $3B on Beats!
Spotify is free... in fact 75% of the users aren't paying to use it. Pandora which is much larger than Spotify is also free.