An acquisition of Quibi would be most similar to the Beats by Dre deal. That bought…
a few powerful music industry execs, some of whom have already bailed
a headphone market whose cultural cachet is already sunsetting
Beats Music — everyone overlooks this, but it was the whole point. Can you even imagine Apple Services without a streaming music platform? They didn't write that, they bought it.
Quibi has literally nothing but the name Jeffrey Katzenberg. No tech, no audience, just a guy with a rolodex.
Neeva though… there are a lot of parallels between Apple's reliance on Google Search and their old reliance on Google Maps. And Google Search is getting worse all the time. I dunno if Neeva has the talent Apple needs to bring web search in-house, but…
I think this is massively overstating the importance of Beats for Apple.
1) As you point out, the execs bailed. This didn't bring much to Apple.
2) The headphones also didnt do anything for Apple. It provided Apple with a few millions of dollars of profits. Nothing worth the billion or so they paid for it. Nor was Beats particularly known for their engineering. In fact their headphones were well known to have poor sound with the bass turned right up. The brand has been decimated by the Apple developed Apple line of earphones, and the Beats brand itself carries very little cache.
3) Beats music was not the precursor to Apple music. In fact, Apple had to negotiate completely different deals. The technology was also completely different (in fact, Beats itself acquired its tech for 5-10 million).
It's hard to see what value Beats provided Apple.
And Quibi will only be worse.
Only a few million dollars from Beats headphones? Come on, man, you can’t really believe that.
I am sure Apple has made a profit from the Beats acquisition.
But that isn’t the point, and I wouldn’t dismiss Eric’s thoughts out of hand. Did Apple really, really need to outlay $3 billion to buy Beats to make those profits?
If Apple wanted to make a billion dollars out of headphones, it was not necessary to buy Beats. Are you saying that Apple, Apple of all companies, was unable to make a better set of cans that Beats? (Tip, Beats/Apple headphones are now way better than they were prior to acquisition, and the step up to the next level will be complete with the next version of the studio headphones, if rumours are true).
I am not even sure beats music was a good acquisition, the interface of Apple Music even to this day is a bit of a mess and its ability to find new music often problematic (trust me, no matter how much Apple Music thinks, I am not interested in Hip Hop). I struggle to think Apple could not have built a better services platform in house for less without needing the Beats Music backbone. They were/are still Next people in Apple.
Apple was buying the cachet of the executives. For $3 Billion. Because Dr Dre is way, way cooler than Tim Cook and Eddie Cue, certainly than they think of themselves, nerds that they are. It didn’t matter because Apple is so rich $3B is nothing, but they could have done it in house, and I doubt it would have cost $3B.
The other benefit of course is it took a competitor out of the nascent subscription services market.
...and removed a very profitable competitor in the headphones business. You almost made that connection and somehow failed to do so.
These kinds of takes are hilarious. By all measures it was an extremely successful acquisition.
I am saying that Apple could have made more money making its own headphones than selling Beats ones. I am sure Apple sells a tonne more airpods than beats headphones. Anyway, Beats was more than just headphones. The question is not if the acquisition made money, it is did buying beats make more money for Apple than if it had done it in house?
No one really knows the answer to that (well maybe Eddie, but he won’t tell), but I am not convinced the acquisition made more money than doing it in house.
An acquisition of Quibi would be most similar to the Beats by Dre deal. That bought…
a few powerful music industry execs, some of whom have already bailed
a headphone market whose cultural cachet is already sunsetting
Beats Music — everyone overlooks this, but it was the whole point. Can you even imagine Apple Services without a streaming music platform? They didn't write that, they bought it.
Quibi has literally nothing but the name Jeffrey Katzenberg. No tech, no audience, just a guy with a rolodex.
Neeva though… there are a lot of parallels between Apple's reliance on Google Search and their old reliance on Google Maps. And Google Search is getting worse all the time. I dunno if Neeva has the talent Apple needs to bring web search in-house, but…
I think this is massively overstating the importance of Beats for Apple.
1) As you point out, the execs bailed. This didn't bring much to Apple.
2) The headphones also didnt do anything for Apple. It provided Apple with a few millions of dollars of profits. Nothing worth the billion or so they paid for it. Nor was Beats particularly known for their engineering. In fact their headphones were well known to have poor sound with the bass turned right up. The brand has been decimated by the Apple developed Apple line of earphones, and the Beats brand itself carries very little cache.
3) Beats music was not the precursor to Apple music. In fact, Apple had to negotiate completely different deals. The technology was also completely different (in fact, Beats itself acquired its tech for 5-10 million).
It's hard to see what value Beats provided Apple.
And Quibi will only be worse.
Only a few million dollars from Beats headphones? Come on, man, you can’t really believe that.
I am sure Apple has made a profit from the Beats acquisition.
But that isn’t the point, and I wouldn’t dismiss Eric’s thoughts out of hand. Did Apple really, really need to outlay $3 billion to buy Beats to make those profits?
If Apple wanted to make a billion dollars out of headphones, it was not necessary to buy Beats. Are you saying that Apple, Apple of all companies, was unable to make a better set of cans that Beats? (Tip, Beats/Apple headphones are now way better than they were prior to acquisition, and the step up to the next level will be complete with the next version of the studio headphones, if rumours are true).
I am not even sure beats music was a good acquisition, the interface of Apple Music even to this day is a bit of a mess and its ability to find new music often problematic (trust me, no matter how much Apple Music thinks, I am not interested in Hip Hop). I struggle to think Apple could not have built a better services platform in house for less without needing the Beats Music backbone. They were/are still Next people in Apple.
Apple was buying the cachet of the executives. For $3 Billion. Because Dr Dre is way, way cooler than Tim Cook and Eddie Cue, certainly than they think of themselves, nerds that they are. It didn’t matter because Apple is so rich $3B is nothing, but they could have done it in house, and I doubt it would have cost $3B.
The other benefit of course is it took a competitor out of the nascent subscription services market.
...and removed a very profitable competitor in the headphones business. You almost made that connection and somehow failed to do so.
These kinds of takes are hilarious. By all measures it was an extremely successful acquisition.
I am saying that Apple could have made more money making its own headphones than selling Beats ones. I am sure Apple sells a tonne more airpods than beats headphones. Anyway, Beats was more than just headphones. The question is not if the acquisition made money, it is did buying beats make more money for Apple than if it had done it in house?
No one really knows the answer to that (well maybe Eddie, but he won’t tell), but I am not convinced the acquisition made more money than doing it in house.
Doing what in house, make headphones? They were already doing that. Now they make both Apple and Beats branded headphones, the latter of which people would be buying still had they just made their own. Now customers of both of those brands are buying from Apple. It's a win win so I don't even know what you're really arguing here.
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