If I were Apple, I would be looking at maybe buying Savant Systems, which is a 100% Apple based company that goes after the higher end home/business automation systems market. They have a rock solid track record of innovative products, they are 100% Apple based, they are growing in a market that IS growing quite rapidly. So, I think if that company wanted to get absorbed into Apple, that might be a great buyout and then let the company run independently of Apple, but giving them access back and forth to the engineering group. They have some slick UI ideas for managing a home/business automation system. I don't know how expensive the company would be to buy them out, but I would look at them.
There are a few other smaller players that might be interesting but it would be more technology based companies rather than lo-fi headphones.
Let just say this: The Beats deal makes sense if 50% of the deal goes directly to Iovine ($1.6 billion) and it is treated like a hire for Apple.
The other guy is just a bad rap artist that is not worth that kind of money. That is the hold up. Ego.
Dr. Dre owns a rumored 20-25% of Beats. Iovine likely owns far more. Dr. Dre did not start out in Hip-Hop. He started out producing for The World Class Wrecking Cru. He is is a producer not a Rapper/Hip-Hop artist.
If there is a deal being made it's being hammered out. Billboard and others are just trying to milk the Soap Opera.
That comment borders on the idiotic. One, he reversed it. Two, and more important, your observation has nothing to with my post, which was (and your response to that too was) specifically about the likely valuation for Beats.
Don't change the premise midway through a conversation.
Apparently Apple doesn't have a handle on it if this article is to be believed. One of the points in this article was they weren't sure how to value it. That's my point about John Browett. Clearly Cook didn't know what he was buying there. And a deal like this would be much harder to reverse.
What I've read is that the electronics portion of Beats (headphones) makes a decent profit, but the Beats Music (subscription service) is losing money as they were looking for $100 Million more for the Beats Music division, which doesn't surprise me.
If you look at the Net Profits to Gross Revenue for any content subscription, movie rental (NetFlix), Digital Download (Amazon), etc. it's a VERY low profit margin business.
Apple just needs to negotiate deals to offer a subscription service, but I don't think they NEED to at this time. Several reasons why I feel this way.
1. They can't get the entire catalogs from the record distributors to allow for subscription based music downloads as they simply don't let companies offer the entire catalog.
2. No one has proven that it's profitable. Apple's iTunes, is the largest download site and they don't run off of large Net Profit margin, as it's more offered as a convenience (and to help fend off illegal downloads) to Apple iPod customers as that what it was originally designed for. I just think it's more of getting Beats out of the picture instead of Google, Microsoft, etc. from buying them out.
Whether this happens or not, if Apple simply walked away from the deal, it would probably make Beats less valuable and less attractive to someone else buying them out as it would signal lots of questions behind them bailing on the deal.
I wish I had more answers than that, but since Cook & Co. have been tight lipped on it, who knows what the reality is behind this deal. Maybe Cook finally got exposed to things that changes the deal after the YouTube video that Dr. Dre released with his drinking buddies. I'm sure that might have some impact on this since it was prematurely released that the deal was signed and sealed and official. I'm sure that didn't go over well in Cupertino.
1. Apple need to revamp iTunes ASAP as subscription music outfits are a threat to the iTunes model long term.
2. Apple is buying Beats for what Iovine and Dre can do for Apple and not just what they have.
3. If Iovine and Dre can help revamp iTunes and get iTV off the ground, they're worth more than $3 Billion to Apple. They may already have been instrumental in getting iTunes off of the ground with Steve Jobs, leading to a $500+ Billion market cap for Apple.
You need to think big to see the potential benefits of this deal. It's about much more than technology and products.
1. Apple need to revamp iTunes ASAP as subscription music outfits are a threat to the iTunes model long term.
2. Apple is buying Beats for what Iovine and Dre can do for Apple and not just what they have.
3. If Iovine and Dre can help revamp iTunes and get iTV off the ground, they're worth more than $3 Billion to Apple. They may already have been instrumental in getting iTunes off of the ground with Steve Jobs, leading to a $500+ Billion market cap for Apple.
You need to think big to see the potential benefits of this deal. It's about much more than technology and products.
1. Apple need to revamp iTunes ASAP as subscription music outfits are a threat to the iTunes model long term.
2. Apple is buying Beats for what Iovine and Dre can do for Apple and not just what they have.
3. If Iovine and Dre can help revamp iTunes and get iTV off the ground, they're worth more than $3 Billion to Apple. They may already have been instrumental in getting iTunes off of the ground with Steve Jobs, leading to a $500+ Billion market cap for Apple.
You need to think big to see the potential benefits of this deal. It's about much more than technology and products.
1. None of the subscription music services are a threat to ITunes, most of that mentality is conjured up by the media and it's nothing but misleading hype.
2. Neither of these two can design an actual product.
3. How could they help? Their celebrity status? For $3.2 Billion, Apple could hire 100 famous celebrities to do a series of print and TV ads for the next. 20 years and probably have money left over.
Apparently Apple doesn't have a handle on it if this article is to be believed. One of the points in this article was they weren't sure how to value it. That's my point about John Browett. Clearly Cook didn't know what he was buying there. And a deal like this would be much harder to reverse.
"... If the article is to be believed"? Really? Some dingbat entertainment publication is likely to have a more credible handle on valuing an acquisition asset than Apple does? Really?
Look, if you so badly want to 'win the argument' by stooping to such logical ridiculousness, be my guest.
1. None of the subscription music services are a threat to ITunes, most of that mentality is conjured up by the media and it's nothing but misleading hype.
2. Neither of these two can design an actual product.
3. How could they help? Their celebrity status? For $3.2 Billion, Apple could hire 100 famous celebrities to do a series of print and TV ads for the next. 20 years and probably have money left over.
1. Don't be foolish, Spotify is determined to take a bite out of iTunes and remember that iTunes content is key behind the success of iPhones, iPads and iPods etc... People like the idea of having full access to all the latest music for a small yearly fee. Apple needs to provide that.
Check this out...
2. These guys are not designers nor are they engineers but the record labels and media houses will trust them with deals that they would never trust current Apple management with regardless of money. You see, if they can bring in Universal and succeed, then the others will likely follow. It's as if the media industry is going to trust Apple with all the goods, they want one of their own on the Apple side of the deal to keep things in check.
3. Forget about celebrity it's a matter of trust although Beats probably has a very talented marketing team. If I own all the content and you want me to trust you with all of it without restrictions then I want to be dealing with someone that I can trust. I think Iovine was instrumental in getting the original unprecedented iTunes deal for Steve Jobs. Now Apple needs unrestricted access to all sorts of media to revamp iTunes and get iTV off of the ground, I think they are going back to Beats.
In my opinion, if Apple buys beats for 3 Billion, Beats will be worth $300 Billion by the second anniversary of the deal.
Apple use to be a computer company. It changed radically about 10 years ago into a portable device and media / cloud company.
Apple is about to change radically again with Mobile Payments, Wearables and Television amongst other things... Fasten your seat belts folks.
Imagine if Apple could come up with an a la carte model to take unrestricted Music, TV, Movies, Podcasts and Education global?
"... If the article is to be believed"? Really? Some dingbat entertainment publication is likely to have a more credible handle on valuing an acquisition asset than Apple does? Really?
Look, if you so badly want to 'win the argument' by stooping to such logical ridiculousness, be my guest.
um, per the article:
Another person who’s been in and around the discussions tells Billboard Apple was nowhere near ready to have this news break as it tries to work out what exactly it’s getting for $3.2 billion.
But we’ve also heard concerns as to whether they’ll fit in or if they would be best as permanent consultants rather than full-time executives.
Sources say there is still some discussion around figuring out the valuation of Beats Music. Given it has less than 200,000 subscribers, doesn’t yet have much market traction and is built on a white label service, what is it worth to Apple? We’d heard a $200 million valuation before news of the Apple deal broke. Is it worth that much or in fact a lot more if it is the reason for deal? This is what both sides have been unable to agree on so far, according to a source.
1. Don't be foolish, Spotify is determined to take a bite out of iTunes and remember that iTunes content is key behind the success of iPhones, iPads and iPods etc... People like the idea of having full access to access to all the latest music for a small yearly fee. Apple needs to provide that.
Check this out...
2. These guys are not designers nor are they engineers but the record labels and media houses will trust them with deals that they would never trust current Apple management with regardless of money. You see, if they can bring in Universal, the others will likely follow. It's as if the media industry is going to trust Apple with all the goods, they want one of their own on the Apple side of the deal to keep things in check.
3. Forget about celebrity it's a matter of trust. If I own all the content and you want me to trust you with all of it without restrictions then I want to be dealing with someone that I can trust. I think Iovine was instrumental in getting the original unprecedented iTunes deal for Steve Jobs. Now Apple needs unrestricted access to all sorts of media to revamp iTunes and get iTV off of the ground, I think they are going back to Beats.
In my opinion, if Apple buys beats for 3 Billion, Beats will be worth $300 Billion by the second anniversary of the deal.
Apple use to be a computer company. It changed radically about 10 years ago into a portable device and media company.
Apple is about to change radically again with Mobile Payments, Wearables and Television amongst other things... Fasten your seat belts folks.
Imagine if Apple could come up with an a la carte model to take unrestricted Music, TV, Movies, Podcasts and Education global?
1. How many PAID subscription holders on Spotify are there? About 1 Million. How many active iTunes account holders are there? 800 Million.
If Spotify is charging about $10 a month, and Apple has people buying more than $120 a year on iTunes, it's going to take a VERY long time until Spotify makes even a 5% dent in Apple. Remember, Apple is STILL growing the number of iTunes accounts as they are opening up new markets and more people are switching to Apple. Having 20 Million tracks doesn't mean anything. Apple still has over 26 Million songs and they have a bunch of exclusive content. The problem with the subscription service is that they only sell about $10 a month in subscriptions, yet Apple can EASILY sell that much in actual downloads and then people can use the FREE Radio service in addition. I don't see the subscription service making enough money.
2. HUH? I don't even understand a word you are saying, it makes no sense whatsoever. What's not to trust about Apple selling content? They've been selling more content than anyone. Your logic made NO SENSE. Seriously, you need to work on your logic on this.
3. Trust? MY ASS. Apple is a Fortune 100 company, Beats isn't even a publicly traded company. So, what's this trust issue all about? Apple reports all of the sales of everything to the record labels whenever they want it so they already have a system in place to pay the proper royalties. Trust about who sells the content is not, nor has it ever been in question with Apple.
4. Apple can only offer content in the manner in which the content houses allow. If the content house allow for a specific model that Apple wants to do, they can figure that out without Dr. Dre or Iovine. They already know all of the various possibilities, it's just a matter of what they want to do that makes the most sense that the content distributors want to buy into.
5. Beats at the rate they are going will NEVER be worth $300 Billion unless they go public and BS the media and potential share holders that the company is going to make a lot of money. By the time Beats (without being bought out by Apple) is worth $300 Billion, Apple would be worth $300 Trillion. Look at Netflix, they are publicly traded and they have been in business longer than Beats and they are grossly overvalued at $24Billion, and they actually have over $4.3 Billion in Gross Revenue. Beats Music doesn't even make a profit right now. The Headphone market is just an accessory item and it's never going to be that big to warrant being a $300 Billion company. The Beats Music was losing money. I think someone is wrong with your logic and reasoning behind this.
1. How many PAID subscription holders on Spotify are there? About 1 Million. How many active iTunes account holders are there? 800 Million.
If Spotify is charging about $10 a month, and Apple has people buying more than $120 a year on iTunes, it's going to take a VERY long time until Spotify makes even a 5% dent in Apple. Remember, Apple is STILL growing the number of iTunes accounts as they are opening up new markets and more people are switching to Apple. Having 20 Million tracks doesn't mean anything. Apple still has over 26 Million songs and they have a bunch of exclusive content. The problem with the subscription service is that they only sell about $10 a month in subscriptions, yet Apple can EASILY sell that much in actual downloads and then people can use the FREE Radio service in addition. I don't see the subscription service making enough money.
2. HUH? I don't even understand a word you are saying, it makes no sense whatsoever. What's not to trust about Apple selling content? They've been selling more content than anyone. Your logic made NO SENSE. Seriously, you need to work on your logic on this.
3. Trust? MY ASS. Apple is a Fortune 100 company, Beats isn't even a publicly traded company. So, what's this trust issue all about? Apple reports all of the sales of everything to the record labels whenever they want it so they already have a system in place to pay the proper royalties. Trust about who sells the content is not, nor has it ever been in question with Apple.
4. Apple can only offer content in the manner in which the content houses allow. If the content house allow for a specific model that Apple wants to do, they can figure that out without Dr. Dre or Iovine. They already know all of the various possibilities, it's just a matter of what they want to do that makes the most sense that the content distributors want to buy into.
5. Beats at the rate they are going will NEVER be worth $300 Billion unless they go public and BS the media and potential share holders that the company is going to make a lot of money. By the time Beats (without being bought out by Apple) is worth $300 Billion, Apple would be worth $300 Trillion. Look at Netflix, they are publicly traded and they have been in business longer than Beats and they are grossly overvalued at $24Billion, and they actually have over $4.3 Billion in Gross Revenue. Beats Music doesn't even make a profit right now. The Headphone market is just an accessory item and it's never going to be that big to warrant being a $300 Billion company. The Beats Music was losing money. I think someone is wrong with your logic and reasoning behind this.
1. No, Apple cannot wait until they reach hundreds of millions to respond. As more people subscribe, they will buy less.
Ratio of paying subscribers to active free users: Over 20%
Revenue paid to rights holders since launch: $1bn
Number of songs: Over 20 million**
Number of songs added per day: Over 20,000
Number of playlists: Over 1.5 billion created so far
Available in 56 markets - Andorra, Argentina, Austria, Australia, Belgium, Bolivia, Bulgaria, Chile, Colombia, Costa Rica, Cyprus, Czech Republic, Denmark, Dominican Republic, Ecuador, El Salvador, Estonia, Finland, France, Germany, Greece, Guatemala, Honduras, Hong Kong, Hungary, Iceland, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malaysia, Malta, Mexico, Monaco, New Zealand, Netherlands, Nicaragua, Norway, Panama, Paraguay, Peru, Philippines, Poland, Portugal, Singapore, Slovakia, Spain, Sweden, Switzerland, Taiwan, Turkey, UK, Uruguay and USA.
2. Never mind.
3. If Apple is so powerful how come they could not launch iTV 2 years ago? They were ready technology wise and they had the money but they could not do it. Why? If they had friends like Iovine and Dre inside of Comcast, TimeWarner and Verizon, perhaps they could have launched in the States at least not to mention globally.
4. That is true and that's were Iovine comes in with Beats. Remember that Iovine and Dre do not own 100% of Beats, other Media industry moguls stand to make a lot of money as well.
5. With Apple behind Beats, I think it can but I could be wrong. We all know that a dying Apple 10 years ago turned a 400+ million purchase of NeXT into what is now worth 500+ Billion. What can a healthy Apple do in the next few years? I submit that Apple is on the verge of reinventing itself yet again. (Mobile Payments, Smart Wearables, Global Media anywhere).
1. No, Wikipedia says "the service had approximately 10 million users as of 15 September 2010,<span style="line-height:22px;"> </span> about 2.5 million of whom were paying users.<span style="line-height:22px;"> </span> Total users reached 20 million by December 2012, 5 million of whom pay a monthly subscription fee that varies based on locale."
2. Never mind.
3. If Apple is so powerful how come they could not launch iTV 2 years ago? They were ready technology wise and they had the money but they could not do it. Why?
4. That is true and that's were Iovine comes in with Beats. Remember that Iovine and Dre do not own 100% of Beats, other Media industry moguls stand to make a lot of money as well.
5. With Apple behind Beats, I think it can but I could be wrong. We all know that a dying Apple 10 years ago turned a 400+ purchase of NeXT into what is now worth 500+ Billion. What can a healthy Apple do in the next few years?
1. OK, so Spotify has 2.5 million paid users paying $10 a month. That's about $300 Million a year GROSS REVENUE. What's their Net Profit? Are they even making a profit? If so, how much? How much does iTunes store make in Gross Revenue? I just read that Apple iTunes has about $2.4 Billion in revenue for the Q1 of '14. So, they are raking in around $10Billion a year from iTunes. Now, if Apple buys Beats, they will probably roll Beats Music into iTunes and therefor Beats Music as people know it will go bye bye and will become a non-issue. It makes ZERO sense for Apple to buy Beats Music and let them continue to run independently of iTunes. Then the Beats name will become worthless as the company would cease to exist. The problem is no one knows how many of the 800 Million Apple iTunes account holders will pay for a $10 a month subscription service for just music. 1%, 5%, 10%, 20%, etc. of these 800 Million account holders? And how many download sales will there be once someone signs on to the monthly subscription? I buy some content through Apple iTunes, but not that much. I don't know if I would pay $10 a month for subscription service for music and I don't know how many others will either. Time will tell how successful Apple will be, but they could do this without Dr. Dre and Iovine. They don't NEED them to do it is my point.
2. NEVER MIND.
3.. iTV? Apple has their current TV box and they are working with the TV stations (which Iovine and Dr. Dre have nothing to do with TV or Cable TV). As far as what the next replacement product is going to be is as much of a guess as anyone else. but it's the cable TV companies that don't want Apple taking control over the cable TV industry as a LOT of cable companies like Comcast, etc. stand to go out of business. Iovine and Dr. Dre couldn't do anything about that even if Dr. Dre got all of his gangster rappers to apply any gangster tactics against the CEOs. Both Iovine and Dre are USELESS in this area. Apple has to deal with the major networks to figure out how to distribute through whatever Apple has cooked up. I'm sure we'll find out soon. Beats doesn't do anything but music subscription and they are LOSING MONEY. Apple has to deal with people that are in the cable TV business. Why? I haven't a clue and iodine and Dre are useless in this area.
4. I could care less who owns what percentage of Beats.
5. Apple bought NeXT and through perseverance and coming up with the iPod, then the iPhone and iPad and continuing their improvements in Laptops and desktops, iTunes, Apple Stores, App Stores, etc. Apple eventually gained a lot of business, but in case you've been living under a rock, Apple's Gross Revenues and Net Profits are flattening out because they can't grow the company as fast as they once did. This happens to MOST companies. They have a lot of growth rate until things get saturated. I think Apple has more growth potential with focusing on OS X computers than playing the BS game behind iTunes. There are a LOT of frustrated Windows users that are getting ready to switch to OS X and Apple would be MUCH better off doing more to attract those people than playing around with content that's basically low margin business. Apple needs to obviously bring out larger screen iPhones, maybe a 12 inch iPad, continue making new laptops and desktops, and I think they could do well with a SmartTV, but the two BIGGEST problems with SmartTVs are actually two fold. 1. People don't replace TVs as often as computers/mobile devices and 2. The percentage of people that actually use their smartTV for more than just a TV is very small. Most people that buy a SmartTV don't actually use the "Smart" portion of the TV, much like most people that have a 3D TV don't watch 3D content as much as they watch 2D content. Apple just has to do what they do to continue with a 10% to 20% year to year growth rate because the days of 35% or more growth rate are pretty over for the time being. The sooner you get the concept out of your head that Apple is still in hyper growth mode, the better.
An article from Billboard. Last time i checked, they don't conver tech news. Plus it's only rumors.
But one would assume Billboard is tuned in to Jimmy Iovine and Dre sine they're in the music business. Nothing about this deal seems very techie to me.
1. OK, so Spotify has 2.5 million paid users paying $10 a month. That's about $300 Million a year GROSS REVENUE. What's their Net Profit? Are they even making a profit? If so, how much? How much does iTunes store make in Gross Revenue? I just read that Apple iTunes has about $2.4 Billion in revenue for the Q1 of '14. So, they are raking in around $10Billion a year from iTunes. Now, if Apple buys Beats, they will probably roll Beats Music into iTunes and therefor Beats Music as people know it will go bye bye and will become a non-issue. It makes ZERO sense for Apple to buy Beats Music and let them continue to run independently of iTunes. Then the Beats name will become worthless as the company would cease to exist. The problem is no one knows how many of the 800 Million Apple iTunes account holders will pay for a $10 a month subscription service for just music. 1%, 5%, 10%, 20%, etc. of these 800 Million account holders? And how many download sales will there be once someone signs on to the monthly subscription? I buy some content through Apple iTunes, but not that much. I don't know if I would pay $10 a month for subscription service for music and I don't know how many others will either. Time will tell how successful Apple will be, but they could do this without Dr. Dre and Iovine. They don't NEED them to do it is my point.
2. NEVER MIND.
3.. iTV? Apple has their current TV box and they are working with the TV stations (which Iovine and Dr. Dre have nothing to do with TV or Cable TV). As far as what the next replacement product is going to be is as much of a guess as anyone else. but it's the cable TV companies that don't want Apple taking control over the cable TV industry as a LOT of cable companies like Comcast, etc. stand to go out of business. Iovine and Dr. Dre couldn't do anything about that even if Dr. Dre got all of his gangster rappers to apply any gangster tactics against the CEOs. Both Iovine and Dre are USELESS in this area. Apple has to deal with the major networks to figure out how to distribute through whatever Apple has cooked up. I'm sure we'll find out soon. Beats doesn't do anything but music subscription and they are LOSING MONEY. Apple has to deal with people that are in the cable TV business. Why? I haven't a clue and iodine and Dre are useless in this area.
4. I could care less who owns what percentage of Beats.
5. Apple bought NeXT and through perseverance and coming up with the iPod, then the iPhone and iPad and continuing their improvements in Laptops and desktops, iTunes, Apple Stores, App Stores, etc. Apple eventually gained a lot of business, but in case you've been living under a rock, Apple's Gross Revenues and Net Profits are flattening out because they can't grow the company as fast as they once did. This happens to MOST companies. They have a lot of growth rate until things get saturated. I think Apple has more growth potential with focusing on OS X computers than playing the BS game behind iTunes. There are a LOT of frustrated Windows users that are getting ready to switch to OS X and Apple would be MUCH better off doing more to attract those people than playing around with content that's basically low margin business. Apple needs to obviously bring out larger screen iPhones, maybe a 12 inch iPad, continue making new laptops and desktops, and I think they could do well with a SmartTV, but the two BIGGEST problems with SmartTVs are actually two fold. 1. People don't replace TVs as often as computers/mobile devices and 2. The percentage of people that actually use their smartTV for more than just a TV is very small. Most people that buy a SmartTV don't actually use the "Smart" portion of the TV, much like most people that have a 3D TV don't watch 3D content as much as they watch 2D content. Apple just has to do what they do to continue with a 10% to 20% year to year growth rate because the days of 35% or more growth rate are pretty over for the time being. The sooner you get the concept out of your head that Apple is still in hyper growth mode, the better.
1. OK. Change that to 10 / 40 million and counting.
2. -
3. With the right model and some industry "Friends" Apple could get cable companies globally to follow their lead.
4. You should care because if media moguls are making money on something they are more likely to support it.
5. iTunes and iPhones/iOS were the main game changers. (The iOS api is a derivative of MacOS which is a derivative of NeXT Step)
I think you have been listening to the financial anal-ysts too long. The best growth days of Apple are still ahead of it. (Mobile Payments, Smart Wearables, Global Media anywhere).
Comments
If I were Apple, I would be looking at maybe buying Savant Systems, which is a 100% Apple based company that goes after the higher end home/business automation systems market. They have a rock solid track record of innovative products, they are 100% Apple based, they are growing in a market that IS growing quite rapidly. So, I think if that company wanted to get absorbed into Apple, that might be a great buyout and then let the company run independently of Apple, but giving them access back and forth to the engineering group. They have some slick UI ideas for managing a home/business automation system. I don't know how expensive the company would be to buy them out, but I would look at them.
There are a few other smaller players that might be interesting but it would be more technology based companies rather than lo-fi headphones.
Let just say this: The Beats deal makes sense if 50% of the deal goes directly to Iovine ($1.6 billion) and it is treated like a hire for Apple.
The other guy is just a bad rap artist that is not worth that kind of money. That is the hold up. Ego.
Dr. Dre owns a rumored 20-25% of Beats. Iovine likely owns far more. Dr. Dre did not start out in Hip-Hop. He started out producing for The World Class Wrecking Cru. He is is a producer not a Rapper/Hip-Hop artist.
If there is a deal being made it's being hammered out. Billboard and others are just trying to milk the Soap Opera.
That comment borders on the idiotic. One, he reversed it. Two, and more important, your observation has nothing to with my post, which was (and your response to that too was) specifically about the likely valuation for Beats.
Don't change the premise midway through a conversation.
Apparently Apple doesn't have a handle on it if this article is to be believed. One of the points in this article was they weren't sure how to value it. That's my point about John Browett. Clearly Cook didn't know what he was buying there. And a deal like this would be much harder to reverse.
What I've read is that the electronics portion of Beats (headphones) makes a decent profit, but the Beats Music (subscription service) is losing money as they were looking for $100 Million more for the Beats Music division, which doesn't surprise me.
If you look at the Net Profits to Gross Revenue for any content subscription, movie rental (NetFlix), Digital Download (Amazon), etc. it's a VERY low profit margin business.
Apple just needs to negotiate deals to offer a subscription service, but I don't think they NEED to at this time. Several reasons why I feel this way.
1. They can't get the entire catalogs from the record distributors to allow for subscription based music downloads as they simply don't let companies offer the entire catalog.
2. No one has proven that it's profitable. Apple's iTunes, is the largest download site and they don't run off of large Net Profit margin, as it's more offered as a convenience (and to help fend off illegal downloads) to Apple iPod customers as that what it was originally designed for. I just think it's more of getting Beats out of the picture instead of Google, Microsoft, etc. from buying them out.
Whether this happens or not, if Apple simply walked away from the deal, it would probably make Beats less valuable and less attractive to someone else buying them out as it would signal lots of questions behind them bailing on the deal.
I wish I had more answers than that, but since Cook & Co. have been tight lipped on it, who knows what the reality is behind this deal. Maybe Cook finally got exposed to things that changes the deal after the YouTube video that Dr. Dre released with his drinking buddies. I'm sure that might have some impact on this since it was prematurely released that the deal was signed and sealed and official. I'm sure that didn't go over well in Cupertino.
1. Apple need to revamp iTunes ASAP as subscription music outfits are a threat to the iTunes model long term.
2. Apple is buying Beats for what Iovine and Dre can do for Apple and not just what they have.
3. If Iovine and Dre can help revamp iTunes and get iTV off the ground, they're worth more than $3 Billion to Apple. They may already have been instrumental in getting iTunes off of the ground with Steve Jobs, leading to a $500+ Billion market cap for Apple.
You need to think big to see the potential benefits of this deal. It's about much more than technology and products.
1. None of the subscription music services are a threat to ITunes, most of that mentality is conjured up by the media and it's nothing but misleading hype.
2. Neither of these two can design an actual product.
3. How could they help? Their celebrity status? For $3.2 Billion, Apple could hire 100 famous celebrities to do a series of print and TV ads for the next. 20 years and probably have money left over.
If this deal goes through, Kim Kardashian will have found the way to make her first billion.
Apple is about make a lot of ordinary people millionaires.
There is still time to invest.
Do you work for Beats or something?
I wish.
That would have made me a millionaire soon.
How is apple going to make a lot of ordinary people millionaires?
"... If the article is to be believed"? Really? Some dingbat entertainment publication is likely to have a more credible handle on valuing an acquisition asset than Apple does? Really?
Look, if you so badly want to 'win the argument' by stooping to such logical ridiculousness, be my guest.
1. None of the subscription music services are a threat to ITunes, most of that mentality is conjured up by the media and it's nothing but misleading hype.
2. Neither of these two can design an actual product.
3. How could they help? Their celebrity status? For $3.2 Billion, Apple could hire 100 famous celebrities to do a series of print and TV ads for the next. 20 years and probably have money left over.
1. Don't be foolish, Spotify is determined to take a bite out of iTunes and remember that iTunes content is key behind the success of iPhones, iPads and iPods etc... People like the idea of having full access to all the latest music for a small yearly fee. Apple needs to provide that.
Check this out...
2. These guys are not designers nor are they engineers but the record labels and media houses will trust them with deals that they would never trust current Apple management with regardless of money. You see, if they can bring in Universal and succeed, then the others will likely follow. It's as if the media industry is going to trust Apple with all the goods, they want one of their own on the Apple side of the deal to keep things in check.
3. Forget about celebrity it's a matter of trust although Beats probably has a very talented marketing team. If I own all the content and you want me to trust you with all of it without restrictions then I want to be dealing with someone that I can trust. I think Iovine was instrumental in getting the original unprecedented iTunes deal for Steve Jobs. Now Apple needs unrestricted access to all sorts of media to revamp iTunes and get iTV off of the ground, I think they are going back to Beats.
In my opinion, if Apple buys beats for 3 Billion, Beats will be worth $300 Billion by the second anniversary of the deal.
Apple use to be a computer company. It changed radically about 10 years ago into a portable device and media / cloud company.
Apple is about to change radically again with Mobile Payments, Wearables and Television amongst other things... Fasten your seat belts folks.
Imagine if Apple could come up with an a la carte model to take unrestricted Music, TV, Movies, Podcasts and Education global?
This has to be the silliest thing I've ever read on these forums! I sincerely hope you're just trolling us.
1. Don't be foolish, Spotify is determined to take a bite out of iTunes and remember that iTunes content is key behind the success of iPhones, iPads and iPods etc... People like the idea of having full access to access to all the latest music for a small yearly fee. Apple needs to provide that.
Check this out...
2. These guys are not designers nor are they engineers but the record labels and media houses will trust them with deals that they would never trust current Apple management with regardless of money. You see, if they can bring in Universal, the others will likely follow. It's as if the media industry is going to trust Apple with all the goods, they want one of their own on the Apple side of the deal to keep things in check.
3. Forget about celebrity it's a matter of trust. If I own all the content and you want me to trust you with all of it without restrictions then I want to be dealing with someone that I can trust. I think Iovine was instrumental in getting the original unprecedented iTunes deal for Steve Jobs. Now Apple needs unrestricted access to all sorts of media to revamp iTunes and get iTV off of the ground, I think they are going back to Beats.
In my opinion, if Apple buys beats for 3 Billion, Beats will be worth $300 Billion by the second anniversary of the deal.
Apple use to be a computer company. It changed radically about 10 years ago into a portable device and media company.
Apple is about to change radically again with Mobile Payments, Wearables and Television amongst other things... Fasten your seat belts folks.
Imagine if Apple could come up with an a la carte model to take unrestricted Music, TV, Movies, Podcasts and Education global?
1. How many PAID subscription holders on Spotify are there? About 1 Million. How many active iTunes account holders are there? 800 Million.
If Spotify is charging about $10 a month, and Apple has people buying more than $120 a year on iTunes, it's going to take a VERY long time until Spotify makes even a 5% dent in Apple. Remember, Apple is STILL growing the number of iTunes accounts as they are opening up new markets and more people are switching to Apple. Having 20 Million tracks doesn't mean anything. Apple still has over 26 Million songs and they have a bunch of exclusive content. The problem with the subscription service is that they only sell about $10 a month in subscriptions, yet Apple can EASILY sell that much in actual downloads and then people can use the FREE Radio service in addition. I don't see the subscription service making enough money.
2. HUH? I don't even understand a word you are saying, it makes no sense whatsoever. What's not to trust about Apple selling content? They've been selling more content than anyone. Your logic made NO SENSE. Seriously, you need to work on your logic on this.
3. Trust? MY ASS. Apple is a Fortune 100 company, Beats isn't even a publicly traded company. So, what's this trust issue all about? Apple reports all of the sales of everything to the record labels whenever they want it so they already have a system in place to pay the proper royalties. Trust about who sells the content is not, nor has it ever been in question with Apple.
4. Apple can only offer content in the manner in which the content houses allow. If the content house allow for a specific model that Apple wants to do, they can figure that out without Dr. Dre or Iovine. They already know all of the various possibilities, it's just a matter of what they want to do that makes the most sense that the content distributors want to buy into.
5. Beats at the rate they are going will NEVER be worth $300 Billion unless they go public and BS the media and potential share holders that the company is going to make a lot of money. By the time Beats (without being bought out by Apple) is worth $300 Billion, Apple would be worth $300 Trillion. Look at Netflix, they are publicly traded and they have been in business longer than Beats and they are grossly overvalued at $24Billion, and they actually have over $4.3 Billion in Gross Revenue. Beats Music doesn't even make a profit right now. The Headphone market is just an accessory item and it's never going to be that big to warrant being a $300 Billion company. The Beats Music was losing money. I think someone is wrong with your logic and reasoning behind this.
1. How many PAID subscription holders on Spotify are there? About 1 Million. How many active iTunes account holders are there? 800 Million.
If Spotify is charging about $10 a month, and Apple has people buying more than $120 a year on iTunes, it's going to take a VERY long time until Spotify makes even a 5% dent in Apple. Remember, Apple is STILL growing the number of iTunes accounts as they are opening up new markets and more people are switching to Apple. Having 20 Million tracks doesn't mean anything. Apple still has over 26 Million songs and they have a bunch of exclusive content. The problem with the subscription service is that they only sell about $10 a month in subscriptions, yet Apple can EASILY sell that much in actual downloads and then people can use the FREE Radio service in addition. I don't see the subscription service making enough money.
2. HUH? I don't even understand a word you are saying, it makes no sense whatsoever. What's not to trust about Apple selling content? They've been selling more content than anyone. Your logic made NO SENSE. Seriously, you need to work on your logic on this.
3. Trust? MY ASS. Apple is a Fortune 100 company, Beats isn't even a publicly traded company. So, what's this trust issue all about? Apple reports all of the sales of everything to the record labels whenever they want it so they already have a system in place to pay the proper royalties. Trust about who sells the content is not, nor has it ever been in question with Apple.
4. Apple can only offer content in the manner in which the content houses allow. If the content house allow for a specific model that Apple wants to do, they can figure that out without Dr. Dre or Iovine. They already know all of the various possibilities, it's just a matter of what they want to do that makes the most sense that the content distributors want to buy into.
5. Beats at the rate they are going will NEVER be worth $300 Billion unless they go public and BS the media and potential share holders that the company is going to make a lot of money. By the time Beats (without being bought out by Apple) is worth $300 Billion, Apple would be worth $300 Trillion. Look at Netflix, they are publicly traded and they have been in business longer than Beats and they are grossly overvalued at $24Billion, and they actually have over $4.3 Billion in Gross Revenue. Beats Music doesn't even make a profit right now. The Headphone market is just an accessory item and it's never going to be that big to warrant being a $300 Billion company. The Beats Music was losing money. I think someone is wrong with your logic and reasoning behind this.
1. No, Apple cannot wait until they reach hundreds of millions to respond. As more people subscribe, they will buy less.
http://press.spotify.com/us/information/
Some fast figures
2. Never mind.
3. If Apple is so powerful how come they could not launch iTV 2 years ago? They were ready technology wise and they had the money but they could not do it. Why? If they had friends like Iovine and Dre inside of Comcast, TimeWarner and Verizon, perhaps they could have launched in the States at least not to mention globally.
4. That is true and that's were Iovine comes in with Beats. Remember that Iovine and Dre do not own 100% of Beats, other Media industry moguls stand to make a lot of money as well.
5. With Apple behind Beats, I think it can but I could be wrong. We all know that a dying Apple 10 years ago turned a 400+ million purchase of NeXT into what is now worth 500+ Billion. What can a healthy Apple do in the next few years? I submit that Apple is on the verge of reinventing itself yet again. (Mobile Payments, Smart Wearables, Global Media anywhere).
1. OK, so Spotify has 2.5 million paid users paying $10 a month. That's about $300 Million a year GROSS REVENUE. What's their Net Profit? Are they even making a profit? If so, how much? How much does iTunes store make in Gross Revenue? I just read that Apple iTunes has about $2.4 Billion in revenue for the Q1 of '14. So, they are raking in around $10Billion a year from iTunes. Now, if Apple buys Beats, they will probably roll Beats Music into iTunes and therefor Beats Music as people know it will go bye bye and will become a non-issue. It makes ZERO sense for Apple to buy Beats Music and let them continue to run independently of iTunes. Then the Beats name will become worthless as the company would cease to exist. The problem is no one knows how many of the 800 Million Apple iTunes account holders will pay for a $10 a month subscription service for just music. 1%, 5%, 10%, 20%, etc. of these 800 Million account holders? And how many download sales will there be once someone signs on to the monthly subscription? I buy some content through Apple iTunes, but not that much. I don't know if I would pay $10 a month for subscription service for music and I don't know how many others will either. Time will tell how successful Apple will be, but they could do this without Dr. Dre and Iovine. They don't NEED them to do it is my point.
2. NEVER MIND.
3.. iTV? Apple has their current TV box and they are working with the TV stations (which Iovine and Dr. Dre have nothing to do with TV or Cable TV). As far as what the next replacement product is going to be is as much of a guess as anyone else. but it's the cable TV companies that don't want Apple taking control over the cable TV industry as a LOT of cable companies like Comcast, etc. stand to go out of business. Iovine and Dr. Dre couldn't do anything about that even if Dr. Dre got all of his gangster rappers to apply any gangster tactics against the CEOs. Both Iovine and Dre are USELESS in this area. Apple has to deal with the major networks to figure out how to distribute through whatever Apple has cooked up. I'm sure we'll find out soon. Beats doesn't do anything but music subscription and they are LOSING MONEY. Apple has to deal with people that are in the cable TV business. Why? I haven't a clue and iodine and Dre are useless in this area.
4. I could care less who owns what percentage of Beats.
5. Apple bought NeXT and through perseverance and coming up with the iPod, then the iPhone and iPad and continuing their improvements in Laptops and desktops, iTunes, Apple Stores, App Stores, etc. Apple eventually gained a lot of business, but in case you've been living under a rock, Apple's Gross Revenues and Net Profits are flattening out because they can't grow the company as fast as they once did. This happens to MOST companies. They have a lot of growth rate until things get saturated. I think Apple has more growth potential with focusing on OS X computers than playing the BS game behind iTunes. There are a LOT of frustrated Windows users that are getting ready to switch to OS X and Apple would be MUCH better off doing more to attract those people than playing around with content that's basically low margin business. Apple needs to obviously bring out larger screen iPhones, maybe a 12 inch iPad, continue making new laptops and desktops, and I think they could do well with a SmartTV, but the two BIGGEST problems with SmartTVs are actually two fold. 1. People don't replace TVs as often as computers/mobile devices and 2. The percentage of people that actually use their smartTV for more than just a TV is very small. Most people that buy a SmartTV don't actually use the "Smart" portion of the TV, much like most people that have a 3D TV don't watch 3D content as much as they watch 2D content. Apple just has to do what they do to continue with a 10% to 20% year to year growth rate because the days of 35% or more growth rate are pretty over for the time being. The sooner you get the concept out of your head that Apple is still in hyper growth mode, the better.
An article from Billboard. Last time i checked, they don't conver tech news. Plus it's only rumors.
1. OK, so Spotify has 2.5 million paid users paying $10 a month. That's about $300 Million a year GROSS REVENUE. What's their Net Profit? Are they even making a profit? If so, how much? How much does iTunes store make in Gross Revenue? I just read that Apple iTunes has about $2.4 Billion in revenue for the Q1 of '14. So, they are raking in around $10Billion a year from iTunes. Now, if Apple buys Beats, they will probably roll Beats Music into iTunes and therefor Beats Music as people know it will go bye bye and will become a non-issue. It makes ZERO sense for Apple to buy Beats Music and let them continue to run independently of iTunes. Then the Beats name will become worthless as the company would cease to exist. The problem is no one knows how many of the 800 Million Apple iTunes account holders will pay for a $10 a month subscription service for just music. 1%, 5%, 10%, 20%, etc. of these 800 Million account holders? And how many download sales will there be once someone signs on to the monthly subscription? I buy some content through Apple iTunes, but not that much. I don't know if I would pay $10 a month for subscription service for music and I don't know how many others will either. Time will tell how successful Apple will be, but they could do this without Dr. Dre and Iovine. They don't NEED them to do it is my point.
2. NEVER MIND.
3.. iTV? Apple has their current TV box and they are working with the TV stations (which Iovine and Dr. Dre have nothing to do with TV or Cable TV). As far as what the next replacement product is going to be is as much of a guess as anyone else. but it's the cable TV companies that don't want Apple taking control over the cable TV industry as a LOT of cable companies like Comcast, etc. stand to go out of business. Iovine and Dr. Dre couldn't do anything about that even if Dr. Dre got all of his gangster rappers to apply any gangster tactics against the CEOs. Both Iovine and Dre are USELESS in this area. Apple has to deal with the major networks to figure out how to distribute through whatever Apple has cooked up. I'm sure we'll find out soon. Beats doesn't do anything but music subscription and they are LOSING MONEY. Apple has to deal with people that are in the cable TV business. Why? I haven't a clue and iodine and Dre are useless in this area.
4. I could care less who owns what percentage of Beats.
5. Apple bought NeXT and through perseverance and coming up with the iPod, then the iPhone and iPad and continuing their improvements in Laptops and desktops, iTunes, Apple Stores, App Stores, etc. Apple eventually gained a lot of business, but in case you've been living under a rock, Apple's Gross Revenues and Net Profits are flattening out because they can't grow the company as fast as they once did. This happens to MOST companies. They have a lot of growth rate until things get saturated. I think Apple has more growth potential with focusing on OS X computers than playing the BS game behind iTunes. There are a LOT of frustrated Windows users that are getting ready to switch to OS X and Apple would be MUCH better off doing more to attract those people than playing around with content that's basically low margin business. Apple needs to obviously bring out larger screen iPhones, maybe a 12 inch iPad, continue making new laptops and desktops, and I think they could do well with a SmartTV, but the two BIGGEST problems with SmartTVs are actually two fold. 1. People don't replace TVs as often as computers/mobile devices and 2. The percentage of people that actually use their smartTV for more than just a TV is very small. Most people that buy a SmartTV don't actually use the "Smart" portion of the TV, much like most people that have a 3D TV don't watch 3D content as much as they watch 2D content. Apple just has to do what they do to continue with a 10% to 20% year to year growth rate because the days of 35% or more growth rate are pretty over for the time being. The sooner you get the concept out of your head that Apple is still in hyper growth mode, the better.
1. OK. Change that to 10 / 40 million and counting.
2. -
3. With the right model and some industry "Friends" Apple could get cable companies globally to follow their lead.
4. You should care because if media moguls are making money on something they are more likely to support it.
5. iTunes and iPhones/iOS were the main game changers. (The iOS api is a derivative of MacOS which is a derivative of NeXT Step)
I think you have been listening to the financial anal-ysts too long. The best growth days of Apple are still ahead of it. (Mobile Payments, Smart Wearables, Global Media anywhere).