Apple's massive $3B bet on Beats a sure thing compared to all-in gamble on NeXT in 1996

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Comments

  • Reply 21 of 108
    indiekidukindiekiduk Posts: 378member
    $375 would have to be a really nice lunch
  • Reply 22 of 108
    rogifanrogifan Posts: 10,669member
    I've no interest in "connected home" solutions. That's something that would be better controlled by Siri or some kind of artificial intelligence that learns from the home dweller's patterns.
    It's disappointing to me. The FT rumor made it sound much more expansive than a MFI sticker on a product. Hopefully there is more to it than that.
  • Reply 23 of 108
    rogifanrogifan Posts: 10,669member
    apple ][ wrote: »
    Good enough for the masses is not a benchmark that Apple should be aspiring to. I hold them to higher standards than that, or at least I used to.
    But hey they're profitable, so I guess that's all that matters these days. The fact that Apple is bringing the design in-house gives me some hope that they'll work to make the products better.
  • Reply 24 of 108
    negafoxnegafox Posts: 480member

    The real reason Apple bought Beats: they gave up trying to develop good earbuds and bought them for their expertise.

     

    /s

     

    But in all seriousness, I sense Apple will bundle Beats branded EarPods with the next-generation iPhone and iPods.

  • Reply 25 of 108
    danyakdanyak Posts: 30member
    No idea how to judge the transaction - except I have to say that as much as I like most Apple products, for me, Apple Radio is useless. Never ceases to amaze me by playing songs unrelated the station I created. I mean, such bad matches I just have to quit it and play my own mix.
  • Reply 26 of 108
    mdriftmeyermdriftmeyer Posts: 7,503member

    This is an ignorant pile of thought. With just over 300 regular full-time employees, world-wide, Apple gains a world class Operating System for the Consumer to the Federal Govt., decades worth of technologies that are the heart and soul of Apple today.

     

    Sorry, but please don't speak of NeXT, unless you were an employee at NeXT. You paint yourself a fool to do so.

  • Reply 27 of 108
    sucajsucaj Posts: 5member

    This acquisition has almost single-handedly sucked out all of my enthusiasm for Apple... and I say this as the owner of my 6th iPhone, 3rd iPad, and countless MacBooks/Powerbooks.   Facebook and Google are busy acquiring innovative tech companies like Oculus and Word Lens - and Apple is busy acquiring for image and style.  This is like Apple acquiring king-of-shitty-audio Bose.  If you think Beats sound good, you should have turned up your bass EQ and saved yourself the $200 brand fee.  This is a horrible mismatch in company culture and product design approach.  This is the business version of cranky old neighbor Tim Cook listening to "the rap music" in order to relate to the neighborhood kids. 

  • Reply 28 of 108
    wigbywigby Posts: 692member
    Quote:

    Originally Posted by TeaEarleGreyHot View Post

     

     

    It's never actually made clear in the news reports I've read whether that billion dollars is profit or sales.  

     

    But, I have a hard time believing it in either case.  


    Typical acquisition costs are 2.5x gross revenue so Beats does 1 billion in revenue. If it was 1 billion in profits, Apple would be paying much more to acquire.

  • Reply 29 of 108
    bikertwinbikertwin Posts: 566member
    15% of $75,000 = 7,500 3,750 = $11,250. OK, you can buy a fairly old used car for that.

    0.5% of $75,000 = $375. That's some lunch! Perhaps you mean an iPod touch?

    Your examples aren't great.
  • Reply 30 of 108
    genovellegenovelle Posts: 1,480member
    I have heard it many times, in fact, numbers as high as $1.5B (http://www.crunchbase.com/organization/beats-by-dr-dre). And, it would be revenue.
    1.5 billion in revenue with their 75% + profit margin = 1.1 billion in profit.
  • Reply 31 of 108
    leavingthebiggleavingthebigg Posts: 1,291member

    I am thinking EVERY supplier of Beats hardware components will soon be receiving a notification signed "Tim Cook".

  • Reply 32 of 108
    wigbywigby Posts: 692member
    Quote:

    Originally Posted by sucaj View Post

     

    This acquisition has almost single-handedly sucked out all of my enthusiasm for Apple... and I say this as the owner of my 6th iPhone, 3rd iPad, and countless MacBooks/Powerbooks.   Facebook and Google are busy acquiring innovative tech companies like Oculus and Word Lens - and Apple is busy acquiring for image and style.  This would be like Apple acquiring Bose.  If you think Beats sound good, you should have turned up your bass EQ and saved yourself the $200 brand fee.  This is a horrible mismatch in company culture and product design approach.  This is the business version of cranky old neighbor Tim Cook listening to "the rap music" in order to relate to the neighborhood kids. 


    I think you're looking at Beats headphones and not much else. According to Apple, they're looking at everything much more than the headphone business. If the headphone business weren't so profitable, Apple would fold it in a heartbeat. Apple doesn't want Beats headphone technology and engineering, they want the brand so that they can build off of that.

     

    I guarantee a 180 degree turnaround in headphone performance quality perception by end of year. Real or not, it's already began. New Beats headphones were announced today and are getting good reviews.

  • Reply 33 of 108
    leavingthebiggleavingthebigg Posts: 1,291member
    Quote:

    Originally Posted by Rogifan View Post





    It's disappointing to me. The FT rumor made it sound much more expansive than a MFI sticker on a product. Hopefully there is more to it than that.

     Please stop being so short sighted about Apple. Check out these links about Apple's possible plans for the connected home...

     

    http://www.patentlyapple.com/patently-apple/2014/05/apple-shines-more-light-on-their-home-controller.html#more

    http://www.patentlyapple.com/patently-apple/2014/05/a-brief-overview-of-ibeacon-technology-that-could-also-be-used-in-future-home-automation.html#more

    http://www.patentlyapple.com/patently-apple/2014/05/apple-may-surprise-the-market-with-a-new-smart-home-platform.html

  • Reply 34 of 108
    tallest skiltallest skil Posts: 43,388member

    Psychosis. Beats is to Apple what SoundJam MP was to Apple.

     

    I make no comment as to the purchase itself here; simply that the comparison is in no way legitimate.

  • Reply 35 of 108
    solipsismxsolipsismx Posts: 19,566member
    genovelle wrote: »
    1.5 billion in revenue with their 75% + profit margin = 1.1 billion in profit.

    In no way is there net profit close to 75%. That would mean an operating margin for HW that's 25%. That's simply not reasonable.
  • Reply 36 of 108
    rogifanrogifan Posts: 10,669member
    I was hoping we'd see more than an MFI program at this WWDC. Yeah I know Apple has a lot of cool patents. I remember seeing ones for smart covers that offered additional functionality 2 years ago. The question is when does some of this stuff finally come to market?
  • Reply 37 of 108
    apple ][apple ][ Posts: 9,233member
    Quote:

    Originally Posted by mdriftmeyer View Post

    Sorry, but please don't speak of NeXT, unless you were an employee at NeXT. You paint yourself a fool to do so.

     

    I've never worked at NeXT and I'm not connected to them in any way, but I would be offended too, if somebody compared NeXT, which provided the foundation that all Apple products are built upon today, to a company that merely makes headphones. What a joke.<img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 38 of 108
    anantksundaramanantksundaram Posts: 20,401member
    Quote:

    Originally Posted by genovelle View Post

    .... their 75% + profit margin ....

    On what planet?

  • Reply 39 of 108
    apple ][apple ][ Posts: 9,233member
    Quote:
    Originally Posted by wigby View Post

     

     Apple doesn't want Beats headphone technology and engineering, they want the brand so that they can build off of that.

     


     

    The Beats brand is garbage compared to Apple, so it makes no sense at all for Apple to want to build off of that.

     

    What's next? Is Ferrari going to acquire the Ford Pinto brand, because they wish to build off of that, since their own name isn't good enough obviously?

  • Reply 40 of 108
    anantksundaramanantksundaram Posts: 20,401member
    Quote:

    Originally Posted by wigby View Post

     

    Typical acquisition costs are 2.5x gross revenue so....


    Where did you see that?!

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