Apple will get a lot of value out of this acquisition, which most of it will help pay for the deal itself in a relatively short amount of time.
I'd say the main reason Apple is going this route is make sure they do not get dethroned as the music leader with iTunes. This will help them stay on top and help lead them into the next generation of content with bright minds, wherever that direction may lead to.
Tim and the Apple board are pretty frugal on acquisitions so to spend $3.2B there has to be a long term plan. It's not for headphone hardware, they could have done that in-house and done a better job. Dre and Iovine are talented and have some great music connections. Having them onboard is definitely a plus. I think the longterm strategy is to expand the iTunes ecosphere. Beats has done an amazing job with Beats Radio in a very short time. They cross platforms. What if Apple decides to take iTunes Radio, enhance it's features with Beats, and make it crossplatform? Using the two new executives clout they negotiate a better price scale on music licensing. Heck if they really wanted to go all out they could take iTunes Music Store cross platform. That would be worth $3.2B.
Into what? Rap? Hip hop? Dino Rock?
How will this enhance Apple's Classical catalogue? Jazz? Country? Blues?
Makes sense actually. There's rumors of a revamped AppleTV in which Apple could be looking for content deals in which case Iovine would be invaluable, Dre to a lesser extent.
The only thing that doesn't really make much sense is the price. As well connected as Iovine and Young are, are they really worth $3.2 billion?
I just don't see how hiring a music insider helps your TV/video business. Is the expectation that he music credentials somehow give him access to the studios?
I'm wondering what the reaction is going to be at WWDC if they drag these two on stage. It could go one of three ways. 1. Cheers, 2. Boos or 3. No response.
This ought to be interesting. I think Cook has lost his mind on this one.
I call BS. This is just an example of how screwed up the press is. One person reported it, with no sources cited. Everything else is someone else reporting on the original report....not an independent story with its own source.
Damn, people are losing their minds over this deal, so let me channel my inner Tim Cook for those of you who have a problem with this deal. If you don't like this deal, too bad, "#dealwithit you are a nobody." If you are a apple supporter and are disappointed in apple for making this deal "get a life." Last but not least if you are a stock/shareholder and you don't like this deal then "get out of the stock." LMFAO.
Google's buying amazing AI (DeepMind), amazing robotics (Boston Dynamics & half a dozen other advanced robotics companies in US and Japan), connected home automation and hardware (Nest) and on the other end, Facebook is buying AI, communications and messaging companies.
What is Cook buying? Urban fashion and bling bling sapphire glass. Oh, and he hired Burberry CEO to run Apple stores with hope she turns them into luxury-like stores.
My iPhone still can't do real-time translation, Siri still sucks when compared to what Google and MS are offering and Maps are still worse than the competition (even a lot more worse if you're not in the US). But T.Diddy doesn't care about that. He is blinging out iPhones and is paying little intention to what you can actually do with these things. I hope that in the future my iPhone won't be just a pretty ornament and a status symbol that can't do much other than look amazing.
Tim Cook = Steve (not Jobs).. but the other Steve… Steve Ballmer.
I just don't see how hiring a music insider helps your TV/video business. Is the expectation that he music credentials somehow give him access to the studios?
My understanding is that he's very close to the musical/entertainment industries:
I don't believe they have to be the perfect fit but I'm sure there are some compromises that can be met. Iovine and Dr. Dre are businessmen and I'm sure they have very good connections to the music business that Apple could use. They're probably going to be used strictly as advisers and so they probably won't be punching a clock. They may have a few meetings every so often and come up with ideas. I honestly don't see how spending $3.2 billion is going to hurt Apple in any way even if the deal doesn't turn out perfectly. I'm sure Apple will get at least a few billion dollars back from the deal in a year's time. If Apple does establish some sort of record label I'm sure this deal will be worth every penny. I'd certainly like to see Apple get into the content business and these two men definitely know how to create content.
So, I think Iovine and Dr. Dre will be good for Apple strictly as advisers and mostly given free reign. I don't know their individual personalities, but maybe true artists never fit that well into a corporate environment. These two guys are leaders and are capable of working on their own instead of blindly following orders. I wouldn't think that Steve Jobs would have fit in a corporate environment because he didn't take crap from anyone and did his own thing. Steve definitely wouldn't have been considered a team player if that's what you're talking about by fitting into a corporate environment.
The studios don't like Apple and are desperate not to given them more control of their partnerships. Having Iovine and Dre front the discussions doesn't seem like it would do much...it's not like the labels wouldn't know their dealing with Apple and have the same feelings toward them. And paying $3.2B for advisors who could then walk away at any time (or get hit by a bus as someone previously mentioned) doesn't seem very well planned.
As for content, what do they know outside of music? Music is not the next frontier. Video is really the next (last?) content industry Apple hasn't really entered into and taken a leading role or at least hasn't led an explosive growth of (as they did for music and mobile apps and games). What do Dre and Iovine bring for signing better distribution deals with the studios?
This deal is an aqui-hire, but not of just Iovine and Dre. This deal is about aquiring their marketing and product teams. Beats isn't two guys in a garage.
Tim and the Apple board are pretty frugal on acquisitions so to spend $3.2B there has to be a long term plan. It's not for headphone hardware, they could have done that in-house and done a better job. Dre and Iovine are talented and have some great music connections. Having them onboard is definitely a plus. I think the longterm strategy is to expand the iTunes ecosphere. Beats has done an amazing job with Beats Radio in a very short time. They cross platforms. What if Apple decides to take iTunes Radio, enhance it's features with Beats, and make it crossplatform? Using the two new executives clout they negotiate a better price scale on music licensing. Heck if they really wanted to go all out they could take iTunes Music Store cross platform. That would be worth $3.2B.
A) the labels would still know they are dealing with apple and still hate apple, whether Iovine and Dre are leading the discussions or not. how much did they accomplish with Beats streaming? Less than 100k paid subscribers? From a technological perspective, what do they bring that Apple couldn't do better for a couple orders of magnitude less money?
Ive is good at hardware, not particularly good at UI design, and is not leading any innovation as far as I've seen or read. He is a designer. He doesn't manage the software or decide what happens on the hardware front with new devices. He just makes whatever is decided elsewhere, pretty.
Comments
I'd say the main reason Apple is going this route is make sure they do not get dethroned as the music leader with iTunes. This will help them stay on top and help lead them into the next generation of content with bright minds, wherever that direction may lead to.
Into what? Rap? Hip hop? Dino Rock?
How will this enhance Apple's Classical catalogue? Jazz? Country? Blues?
LOL, if this is true, Tim Cook is even crazier than he looks.
Please don't make me post a pic of Fonzi jumping the shark- please Apple.
Who is the "well-placed source"?
Solange?
I'm wondering what the reaction is going to be at WWDC if they drag these two on stage. It could go one of three ways. 1. Cheers, 2. Boos or 3. No response.
This ought to be interesting. I think Cook has lost his mind on this one.
Damn, people are losing their minds over this deal, so let me channel my inner Tim Cook for those of you who have a problem with this deal. If you don't like this deal, too bad, "#dealwithit you are a nobody." If you are a apple supporter and are disappointed in apple for making this deal "get a life." Last but not least if you are a stock/shareholder and you don't like this deal then "get out of the stock." LMFAO.
What is Cook buying? Urban fashion and bling bling sapphire glass. Oh, and he hired Burberry CEO to run Apple stores with hope she turns them into luxury-like stores.
My iPhone still can't do real-time translation, Siri still sucks when compared to what Google and MS are offering and Maps are still worse than the competition (even a lot more worse if you're not in the US). But T.Diddy doesn't care about that. He is blinging out iPhones and is paying little intention to what you can actually do with these things. I hope that in the future my iPhone won't be just a pretty ornament and a status symbol that can't do much other than look amazing.
Tim Cook = Steve (not Jobs).. but the other Steve… Steve Ballmer.
I just don't see how hiring a music insider helps your TV/video business. Is the expectation that he music credentials somehow give him access to the studios?
My understanding is that he's very close to the musical/entertainment industries:
https://www.google.com/search?q=jimmy+iovine+relationship+to+music+industry&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a&channel=sb
As for content, what do they know outside of music? Music is not the next frontier. Video is really the next (last?) content industry Apple hasn't really entered into and taken a leading role or at least hasn't led an explosive growth of (as they did for music and mobile apps and games). What do Dre and Iovine bring for signing better distribution deals with the studios?
So his connections in music are expected to translate into movies and TV content contracts?
Is Ive quitting?
Ive is good at hardware, not particularly good at UI design, and is not leading any innovation as far as I've seen or read. He is a designer. He doesn't manage the software or decide what happens on the hardware front with new devices. He just makes whatever is decided elsewhere, pretty.