The news has been making the rounds for a while and it looks official now that Beats By Dre will be part of the Apple family for a cool $3 Billion. This will be Apple’s biggest spend on acquiring a company yet and you have to wonder, why are they doing it?
While Mr Cook and his board may be the only ones who truly know the answer, there are a number of reasons why the acquisition may be particularly synergistic. Here are my top five.
1. Apple sound sucks! I put this first because it matters a lot to me. Apple has the worst sounding equipment, speakers and earbuds. It was hate at first listen for my iPod, iPod Touch, Mac, MacBook. None of them impressed – my aged BlackBerry PlayBook sounds better than my Mac. It’s that bad! Beats Audio is a potential solution to that. Can’t wait! Now to the more serious stuff.
2. iTunes Radio is not as hot as expected. It’s certainly not as hot as “on demand” services like Spotify, or the newish Beats Music. Here’s Apple’s entry into that market.
3. Beats profit margins are huge! Yes. It costs them only a fraction of the selling price to make those “premium” headphones. When I say fraction I literally mean, make it for $20 and sell it for $150. Does that sound like Apple? Go figure.
4. They get Dr Dre and Mr Lovine. These guys know music and how to sell it. That’s straightforward enough.
5. Headphones are the original wearables. No one looks weird in headphones. Well, most people don’t. And they are very well accepted. Don’t be surprised if your Beats headphones get more embedded sensors and functionality. I personally think a heart rate monitor, thermometer, etc could fit in an ear bud and transmit real time performance data to an iPod or iPhone for fitness sessions. There are many other possible spins on this… Siri?
There are many ways to look at this deal, the brands are quite consistent in their premium slant and cool attitude. Looking forward to the fruits (oops) of this union.