Apple to Buy Beats Music and Beats Electronics for $3 Billion
It's official!
Apple has confirmed long standing rumors that it plans to acquire Beats Electronics. Confirmation comes via Apple CEO Tim Cook, who released a statement via Apple's PR department. Cook highlighted the importance of music to Apple, and Beats co-founder Jimmy Iovine says that he had "always known in his heart" that Beats belonged with Apple.
"I've always known in my heart that Beats belonged with Apple," said Jimmy Iovine. "The idea when we started the company was inspired by Apple's unmatched ability to marry culture and technology. Apple's deep commitment to music fans, artists, songwriters and the music industry is something special."
Certainly, Beats and Apple are both prime examples of a company leveraging brand loyalty and culture to move inventory. Now, Iovine and co-founder Dr Dre will join Apple, though the details of their roles in Cupertino remain unknown.
The deal is valued at $3 billion and actually covers two companies, Beats Electronics and Beats Music. The latter is the subscription music service that launched earlier this year. When this news first came out earlier this month (Financial Times had it first week of May), we figured the Beats Music service might be the real reason Apple was after Beats. Sure, the Beats Electronics brand is strong, and Apple has sold Beats audio products in its stores for years. The company sells music through iTunes and runs iTunes Radio, but Apple no doubt wants to snag the folks who are willing to pay a subscription every month to listen to all the music they want.
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Jane McEntegart is a writer, editor, and marketing communications professional with 17 years of experience in the technology industry. She has written about a wide range of technology topics, including smartphones, tablets, and game consoles. Her articles have been published in Tom's Guide, Tom's Hardware, MobileSyrup, and Edge Up.
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notherdude I don't get Beats. Seems like all brand and no substance. I guess these companies deserve each other in a way. Apple really seems to be reaching for its lost mojo and I wager they wont find it here.Reply -
edogawa Unless you like tons of bass it's over rated garbage. At least there is some value in Apple products, beats...not so much. Apple might be trying to stay relevant as they are not innovators.Reply -
NightLight i just don't see how they can make any profit on it after 3 billion in purchase price... I mean...Reply -
alz_solstice Later, we will see an iPhone/iPad/MacBook/iPod with Beats audio and Beats headset. This is going way more OVERPRICED.Reply -
stridervm This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....Reply -
house70 ReplyI don't get Beats. Seems like all brand and no substance. I guess these companies deserve each other in a way. Apple really seems to be reaching for its lost mojo and I wager they wont find it here.
A match made in "heaven", indeed. -
notherdude Reply13385269 said:This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....
Apple has 18% of the mobile market share... the laymen (or fandboy) will say that's tiny. Apple pulls 18% with a dozen products... Android/Google/Samsung pulls 80% with 1,000+ different devices. Apple must be doing something right.
Apple has done a lot right but not much lately. But it is true that they are not 100% brand and no substance like Monster cables for example, or like Beats. But the extent to which Apple is riding on momentum and knee-jerk loyalty and not on innovative, superior products is getting ever more precarious and sooner or later they will seem passe, among many young tech enthusiasts they are already passe, and this is how they try to get their mojo back?
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wemakeourfuture Replyi just don't see how they can make any profit on it after 3 billion in purchase price... I mean...
Yearly revenues are a billion, this can easily be flipped to a profit faster than many purchases large IT corporations make...