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Apple Said to Be in Talks to Buy Beats for $3.2 Billion

104 points by littlemerman 12y ago

fjk 12y ago
The article mentions only Beats Electronics. I think this acquisition becomes a lot more interesting if Beats Music is part of the deal.
- yannyu 12y ago
  This article, hidden behind paywall, specifically calls out Beats Music as part of the acquisition. http://ft.com/intl/cms/s/0/e330e830-d6f3-11e3-b95e-00144feabdc0.html http://ft.com/intl/cms/s/0/e330e830-d6f3-11e3-b95e-00144feab...
- abat 12y ago
  Supposedly (according to Recode.net) Beats music only has around 200,000 subscribers and most of them are free trial users from a AT&T deal. Doesn't sound a like a service Apple would want.
  - goatforce5 12y ago
    Perhaps they have favourable licensing deals for music content that would survive the acquisition....
    - frankdenbow 12y ago
      Its doubtful that the deals would automatically transfer over to the acquirer. Would have to be re-negotiated
      - deleted 12y ago
        [deleted]
  - nt591 12y ago
    I'm not surprised. I'm a Beats subscriber and the only thing going for it is the (actually good) human-curated playlists. However, Spotify seems to have a bigger music catalog and music discovery is good enough.
lawnchair_larry 12y ago
So much for Apple's appearance of being a premium brand. Beats products are junk. Until 2012, they were basically white-labeled Monster Cable products.
- thirsteh 12y ago
  You said it yourself: appearances. The number of people who think Beats cans are for audiophiles is astounding.
- caycep 12y ago
  I doubt it's for the headphones - it's really the content deals, connections and licensing that's the value behind Beats IMHO
- quotient 12y ago
  Yes, it's precisely about appearance. Beats head/earphones are very popular. They were also in some sort of partnership with HP (and perhaps others?) previously --- you can find many HP laptops with Beats Audio. This appears to be a selling point, so combined with the fashionable image of Beats, it makes sense that Apple would want to absorb this brand. Also, most people aren't aware that Beats are junk. Many consumers mistake a strong bass for good audio quality (or even more shockingly, they don't care about quality, and bass is _what they want_).
  - nerfhammer 12y ago
    The "beats audio" in partner hardware is just software eq to filter bass and then turn it back on again. It's sheer chicanery that I am disappointed that Apple would want to associate itself with.
  - mahouse 12y ago
    Not only HP, but HTC phones, until several months ago.
    - lawnchair_larry 12y ago
state 12y ago
I cannot figure out any way to reconcile the incredibly poor quality of Beats products with a hopeful future for Apple. Can someone make the argument for why this is a good idea?
- shashwatak 12y ago
  > poor quality of Beats products They're overpriced, certainly. But poor quality is not fair. They've got good sound, heavy bass, and the build feels solid. EDIT: I don't actually own beats, I prefer my Sennheiser's. But my brother got a pair of Beats as a gift and I've used them.
  - lloeki 12y ago
    The Momentum On-Ear† are top notch quality, full of bass while keeping meds and highs detailed all the while costing much less. Technically, Beats cans are definitely overpriced, you're definitely paying for the style (which is not necessarily a bad thing per se) † The Momentum over ear have a totally different, much more balanced sound. Almost a monitor headset, except with detail being just right so that they don't give too much fatigue.
- Cookingboy 12y ago
  They are over marketed a bit and over priced, sure, but just as much as Bose, B&O and a lot of other premium sound brands. How do they objectively have "incredibly poor quality"? Do you have a link that support they have really poor sound quality or bad build quality or horrible customer satisfaction rate?
  - nerfhammer 12y ago
    “In terms of sound performance, they are among the worst you can buy,” says Tyll Hertsens, editor in chief of InnerFidelity.com, a site for audiophiles. “They are absolutely, extraordinarily bad.” http://www.nytimes.com/2011/11/20/business/beats-headphones-expand-dr-dres-business-world.html http://www.nytimes.com/2011/11/20/business/beats-headphones-...
astrodust 12y ago
This seems like a strange thing to acquire. It's not like Apple couldn't make headphones of that sort if they wanted to, and if they wanted cachet, they'd probably scoop up Bose or Sennheiser, a name with some actual weight behind it. It's amazing that HP's series "With Beats Audio" actually cheapens their product.
- sliverstorm 12y ago
  They doubtless want cachet that resonates with their target market. Ergo Sennheiser probably isn't a great choice. As for Bose, they probably wouldn't be a bad choice, but they do a lot more than headphones and their market cap is $20B, quite a bit more than the $3B we are being told for Beats.
- MichaelGG 12y ago
  I read a thread on Reddit where someone discovered that disabling the "enhanced audio" feature just screwed up the driver EQ system (setting "treble" all the way up and "bass" all the way down).
paul_f 12y ago
$3.2B? I don't get this at all. What exactly does Apple get out of the deal? (1) Their brand is much stronger than Beats. (2) They could design and build high quality headphones if they wanted, the design is quite simple. And (3) if they wanted a music subscription service, they could easily create one of their own.
- dragonwriter 12y ago
  > if they wanted a music subscription service, they could easily create one of their own. Actually, they have one. (iTunes Radio) Of course, the fact that this has to be pointed out to someone arguing how strong Apple's brand is relative to Beats might illustrate the value they get from buying Beats better than anything else.
  - paul_f 12y ago
    My understanding is iTunes radio is Pandora, not Spotify. Big difference. One is Internet radio, the other a true music subscription service.
    - baddox 12y ago
      They've got iTunes Match and iTunes radio, which are both similar to but just slightly to either side of Spotify.
      - leemcalilly 12y ago
        I use iTunes Match and iTunes radio, and still use Spotify to be able to search and play any song I want without having to buy it.
      - justinreeves 12y ago
        I'd say more than slightly. Spotify's main draw is that you can search for the song you want to listen to, and you can hear that song. iTunes match works off your own personal collection, and Radio is just like Pandora. Neither allows you to look for things you don't own and listen to them.
oneeyedpigeon 12y ago
Does this mean we're about to get a new iPod classic? 1,702 days and counting ... [1] [1] http://buyersguide.macrumors.com/#iPod_Classic http://buyersguide.macrumors.com/#iPod_Classic
- orkoden 12y ago
  A great opportunity to revive the iPod Classic. iPod with Beats Audio
ChuckMcM 12y ago
"Apple is in talks to acquire Beats Electronics for about $3.2 billion, according to a person briefed on the matter." I guess there is some disagreement about whether or not Beats is "worth" $3.2B. Such stories, on the eve of an acquisition, are always about trying to get the price raised it seems. Would be interesting if Apple walks away from the deal at this point.
MaysonL 12y ago
If this comes to pass, I will have to agree with those who have been saying that Cook should be canned.
winslow 12y ago
In my eyes, this paints Apple as just another "big company" making acquisitions that don't make sense. Maybe they are going to bundle all ipods with beats...? Not sure where they are going with this unless it's for the music service licensing agreements.
- Tyrannosaurs 12y ago
  Which would be great if the iPod wasn't a decline market. They can put them in with iPhones (adapted to include hands free) but I'm not sure how much that would influence people to buy an iPhone over something else.
- gregsq 12y ago
  Reading through these comments, the thought of Apple bundling beats with devices scares me the most. Ironic that if I acquired another one of their devices, i'd still have to throw their headphones into a draw to collect dust.
dylanhassinger 12y ago
i just got some beats earbuds. they are very clear, i like them
doe88 12y ago
As I see it it's not for the hardware, but for the streaming service and for Jimmy Iovine and his connections/knowledge in the music industry. I don't know how he could fit with Eddy Cue but I think Jimmy Iovine would bring a lot if he was in charge of the music services in iTunes.
- paul_f 12y ago
  Wait until Tim Cook realizes he actually bought Jimmy Iovine's company and not Jony Ive's company. Hilarity sure to ensue.
- leemcalilly 12y ago
  Apple saved the music business with iTunes. Why do they need Jimmy Iovine's connections? I don't see why they need Jimmy Iovine for anything.
  - doe88 12y ago
    Because he is the music industry, because maybe the now mighty Apple has lot of difficulties securing licensing music rights, especially in the streaming area. Now I don't say it's worth 3.2bn$ (I don't think it's even worth 1bn$) but at least I think there is more value there than with the headsets. Anyway spending so much on such a shallow thing would send a wrong signal in my opinion, for the same amount I would have bought AMD or something more significant hardware related.
nashashmi 12y ago
So where does that leave HTC? They own 50.1% stake. They need cash pretty quickly. And I think they would continue to want implementing Beats audio in their phones. Btw, HTC One audio sound quality is emotionally exhilarating. (Tears)
- paul_f 12y ago
  HTC sold their shares in Beats a while ago. They don't own any now.
37prime 12y ago
Roughly about 17% of WhatsApp price tag. Should make us ponder...
gmisra 12y ago
The history of Beats is itself fascinating: http://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-how-monster-lost-the-world http://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-h...
pcurve 12y ago
I think this is pretty damaging to the Apple brand. I'm afraid this will end up costing Apple more billions down the road as it creates uncertainty about their growth strategy.
bobbles 12y ago
I really think people are underestimating the streaming service they could be acquiring here. Currently even as an iTunes Match subscriber, if I hear a song on iTunes radio I still need to go and purchase the song if I like it. Potentially the deals Beats currently have mean I could just tag that song as one I like, and each time I listen to it some amount of revenue is split between the label and Apple. Acquiring beats would undoubtedly mean they also acquire their licencing contracts, which seem to have been traditionally difficult for Apple in the past.
- pohl 12y ago
  Even if they're not interested in the subscription service model, there may be something here that can improve iTunes Radio's song selections: "The service uses a personalization system combining recommendations based on listening habits and algorithms with human curation and playlists from music professionals, including other "guest" curators, such as Rolling Stone, Rap Radar, and Pitchfork. Song searches prioritize the original, master recordings of songs over other versions (such as covers). A feature known as "The Sentence" allows users to generate playlists by filling four blanks in a sentence with words describing various activities, moods, and genres." http://en.wikipedia.org/wiki/Beats_Music http://en.wikipedia.org/wiki/Beats_Music
- pbreit 12y ago
  Actually, it's extremely doubtful the licensing would transfer during an acquisition to Apple.
jackgavigan 12y ago
I'm puzzled by this. If it's about a streaming service, why not acquire Spotify? Could it be about patents? Beats got custody of all the intellectual property when they divorced Monster. https://www.google.com/?tbm=pts&hl=en#aq=f&aqi=&aql=&hl=en&q=%22Beats+Electronics+LLC%22&tbm=pts https://www.google.com/?tbm=pts&hl=en#aq=f&aqi=&aql=&hl=en&q...
robg 12y ago
If true, seems like a submarine into wearable technologies. Apple building mood sensing tech for personalized streaming service is a bit creepy. Apple adding mood sensing tech to a huge, young, existing, user base is broadly exciting. H/T: https://news.ycombinator.com/item?id=7718083 https://news.ycombinator.com/item?id=7718083
abalone 12y ago
This makes even less sense than the Square acquisition rumor. 1. Apple has the tech and library to do their own subscription service if they want to. You think they can't do their own licensing deal? They surely don't need to pay $3B to acquire someone else's. 2. Apple wouldn't want to operate a cross-platform service. They'd pay a huge premium to acquire a bunch of Android customers than they'd promptly purge. Plus, it'd probably invite anti-trust scrutiny. 3. The argument about Beats headphone quality is moot. Even if it's more than just marketing / bass-heavy EQ, Apple would not pay $3B to acquire headphone technology. None of that makes any sense at all. I have to believe someone thinks Beats and Square are interesting to Apple because their products have a certain superficial Apple design aesthetic. But it makes no sense from a business model standpoint. Or maybe Apple's doing some kind of next-level mole hunt here to level-up on secrecy.
- jcampbell1 12y ago
  > You think they can't do their own licensing deal? When you are the richest guy in town it is hard to negotiate a good deal. It is probably much smarter to just buy Beats. If they bought Spotify, they would be stuck supporting Android and Windows customers. The $3B price probably reflects the current profitability of the headphone line. For what it is worth, audio brands seem to have staying power. I am not sure if the quality criticisms are a positive or negative value signal personally.
  - Scorponok 12y ago
    Other services (like spotify) have tended to have clauses in their licenses saying something like "If you get acquired, the deal is cancelled and you have to renegotiate it" so that the record companies can prevent exactly this from happening. I would be surprised if Beats doesn't as well. That means that it doesn't matter if Apple (or anyone else) buys someone who already has a deal - the previous terms go away and the record companies get to start the negotiations all over again.
    - Braveatom 12y ago
      True, but if they have a system ready to roll and are in a good negotiation position (iTunes is effectively a monopoly) it puts a lot of pressure on the labels to sign
Braveatom 12y ago
The major labels have a love/hate relationship with iTunes. It brings in loads of cash, but it's a monopoly and the majors have little to no control (on price and promo, compared to retail). So I wouldn't be surprised if the labels are being somewhat difficult to Apple about streaming rights - they'll dominate, and once again the labels lack control. This deal could get round that somehow? Add to that that I think the labels have vested interests in Spotify and very favourable deals, (while cautious of the streaming model) and it makes sense to not let another player in just yet, especially one like Apple. Apples service is one that'll ride roughshod over everything, installed instantly on 100's of millions of devices with an iOS update - Sounds like a good use of their money to get that sooner rather than later. I haven't used Beats headphones but if their tech could be used to perceivably improve idevice's and laptops built in speaker audio it's a win there too. I'll believe it when I see it though.
kepano 12y ago
Fun fact: Beats' industrial design lead is Robert Brunner, Jony Ive's predecessor as Director of Industrial Design at Apple.
- beltex 12y ago
  Interesting. Brunner tried to hire him several times apparently. https://www.youtube.com/watch?v=GqJVHe6LN4E https://www.youtube.com/watch?v=GqJVHe6LN4E http://en.wikipedia.org/wiki/Robert_Brunner http://en.wikipedia.org/wiki/Robert_Brunner
morkfromork 12y ago
Beats Music has the worst mobile apps.
pbreit 12y ago
Looks like this thread has been downmodded. Why?
k-mcgrady 12y ago
The comments in this thread are similar to the comments in any Facebook related post on HN. Arrogant. People who likely haven't used the product for more than a few minutes have a concrete opinion on it. You may think Beats suck but they sell $500m of headphones per year. People clearly like the sound they produce even if you think it's shit and overpriced.
- cheald 12y ago
  Beats was made popular by the Monster Cable marketing machine, who is specifically known for selling well-marketed overpriced crap. Claiming that they're good because they sell is silly.
  - k-mcgrady 12y ago
    It depends on how you define 'good'. They may not be good for listening to certain genres and they may not have a very balanced sound which a lot of audiophiles desire, but the sound they produce is clearly a sound people want and that is proven by how well they sell. They are not an impulse purchase, they are ridiculously expensive. If people really hated the sound most of them wouldn't buy Beats even with the marketing and fashion aspect.
    - w1ntermute 12y ago
      > the sound they produce is clearly a sound people want Most people are easily fooled when it comes to audio quality and have no idea what sound they "want", so they have to judge the quality of the product on the basis of marketing/branding and design instead. That's exactly what's happening with Beats. And it is entirely sustainable because (in the mainstream) headphones are first and foremost a fashion accessory, and neither Beats wearers nor the observers are know a thing about what good audio quality is. As long as they look hip wearing Beats in the eyes of mainstream observers (a phenomenon that doesn't show any signs of abating), it'll continue to fly off the shelves. As someone else commented above, the job of quality headphones is to reproduce the recorded signal as faithfully as possible - a flat frequency response. If you want enhanced base (for example), that should be done in the software equalizer, before the signal gets fed to the hardware. On an objective level, the audio quality of Beats blows. There's simply no other way to put it. Of course, this is all irrelevant to the unwash^H^H^H^H^H^Huneducated masses.
deleted 12y ago
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thomasf1 12y ago
I could see one way that would make sense: To fix the iPhone 5C debacle. You want to reach lower level customers without tarnishing your main brand... Beats could fit that profile. Just make the colors a bit brighter and the successor to the 5c cheaper. Or sicking with the beats brand (style over quality): Why not use 4s internals ;)?
- thomasf1 12y ago
  Now, what works better? iPhone 5c http://www.extremetech.com/wp-content/uploads/2013/08/iphone-5c-color-options.jpg http://www.extremetech.com/wp-content/uploads/2013/08/iphone... - or - Beats 5c http://i60.tinypic.com/103hnjb.jpg http://i60.tinypic.com/103hnjb.jpg
NicoJuicy 12y ago
For all the people that think its worth it. HTC bought it for 300 million, they sold it as they had no use. Their in the same market as Apple (and with Sense / HTC, they also could use a music broadcast service). They sold it. Now Apple wants to buy it at a much higher level... Doesn't make any sense.
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hadoukenio 12y ago
12 hours after being posted: Ctrl-F: user acquisition Zero results. Look at the last couple of massive acquisitions e.g. Facebook buying companies that made little revenue which made even less sense. Most of the big ones I can think of were for user acquisition and not product/technology. This seems like the same type of play.
- bruceboughton 12y ago
  Apple was recently boasting of having nearly 800mn credit cards-enabled iTunes accounts. Doesn't seem to me they are short of users. Also, Apple is primarily a hardware + associated services company. They're not interested in getting users that aren't Apple hardware owners.
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OWaz 12y ago
It's weird how this April Fools article about Apple buying Beats [1] doesn't seem ridiculous right now. http://lefsetz.com/wordpress/index.php/archives/2014/04/01/apple-buys-beats/ http://lefsetz.com/wordpress/index.php/archives/2014/04/01/a...
scelerat 12y ago
...because music is the next big thing on the horizon? Does Apple have an answer to Nest? To Tesla? To Comcast? I understand Beats is a powerful brand, with a youthful and enthusiastic customer base, and they've entered the streaming space with some panache. Apple already knows how to do music. Is this what they're focusing on? It seems like a distraction and not a terribly advantageous one.
epo 12y ago
Apple make very smart acquisitions and have a track record in creating markets where others have failed to do so. They are also good at spotting opportunities in existing markets. That said, I think this is a deception to get Samsung to do something costly and stupid.

104 points by littlemerman 12y ago

fjk 12y ago

The article mentions only Beats Electronics. I think this acquisition becomes a lot more interesting if Beats Music is part of the deal.

yannyu 12y ago
This article, hidden behind paywall, specifically calls out Beats Music as part of the acquisition. http://ft.com/intl/cms/s/0/e330e830-d6f3-11e3-b95e-00144feabdc0.html http://ft.com/intl/cms/s/0/e330e830-d6f3-11e3-b95e-00144feab...
abat 12y ago
Supposedly (according to Recode.net) Beats music only has around 200,000 subscribers and most of them are free trial users from a AT&T deal. Doesn't sound a like a service Apple would want.
- goatforce5 12y ago
  Perhaps they have favourable licensing deals for music content that would survive the acquisition....
  - frankdenbow 12y ago
    Its doubtful that the deals would automatically transfer over to the acquirer. Would have to be re-negotiated
    - deleted 12y ago
      [deleted]
- nt591 12y ago
  I'm not surprised. I'm a Beats subscriber and the only thing going for it is the (actually good) human-curated playlists. However, Spotify seems to have a bigger music catalog and music discovery is good enough.

lawnchair_larry 12y ago

So much for Apple's appearance of being a premium brand. Beats products are junk. Until 2012, they were basically white-labeled Monster Cable products.

thirsteh 12y ago
You said it yourself: appearances. The number of people who think Beats cans are for audiophiles is astounding.
caycep 12y ago
I doubt it's for the headphones - it's really the content deals, connections and licensing that's the value behind Beats IMHO
quotient 12y ago
Yes, it's precisely about appearance. Beats head/earphones are very popular. They were also in some sort of partnership with HP (and perhaps others?) previously --- you can find many HP laptops with Beats Audio. This appears to be a selling point, so combined with the fashionable image of Beats, it makes sense that Apple would want to absorb this brand. Also, most people aren't aware that Beats are junk. Many consumers mistake a strong bass for good audio quality (or even more shockingly, they don't care about quality, and bass is _what they want_).
- nerfhammer 12y ago
  The "beats audio" in partner hardware is just software eq to filter bass and then turn it back on again. It's sheer chicanery that I am disappointed that Apple would want to associate itself with.
- mahouse 12y ago
  Not only HP, but HTC phones, until several months ago.
  - lawnchair_larry 12y ago

state 12y ago

I cannot figure out any way to reconcile the incredibly poor quality of Beats products with a hopeful future for Apple. Can someone make the argument for why this is a good idea?

shashwatak 12y ago
> poor quality of Beats products They're overpriced, certainly. But poor quality is not fair. They've got good sound, heavy bass, and the build feels solid. EDIT: I don't actually own beats, I prefer my Sennheiser's. But my brother got a pair of Beats as a gift and I've used them.
- lloeki 12y ago
  The Momentum On-Ear† are top notch quality, full of bass while keeping meds and highs detailed all the while costing much less. Technically, Beats cans are definitely overpriced, you're definitely paying for the style (which is not necessarily a bad thing per se) † The Momentum over ear have a totally different, much more balanced sound. Almost a monitor headset, except with detail being just right so that they don't give too much fatigue.
Cookingboy 12y ago
They are over marketed a bit and over priced, sure, but just as much as Bose, B&O and a lot of other premium sound brands. How do they objectively have "incredibly poor quality"? Do you have a link that support they have really poor sound quality or bad build quality or horrible customer satisfaction rate?
- nerfhammer 12y ago
  “In terms of sound performance, they are among the worst you can buy,” says Tyll Hertsens, editor in chief of InnerFidelity.com, a site for audiophiles. “They are absolutely, extraordinarily bad.” http://www.nytimes.com/2011/11/20/business/beats-headphones-expand-dr-dres-business-world.html http://www.nytimes.com/2011/11/20/business/beats-headphones-...

astrodust 12y ago

This seems like a strange thing to acquire. It's not like Apple couldn't make headphones of that sort if they wanted to, and if they wanted cachet, they'd probably scoop up Bose or Sennheiser, a name with some actual weight behind it. It's amazing that HP's series "With Beats Audio" actually cheapens their product.

sliverstorm 12y ago
They doubtless want cachet that resonates with their target market. Ergo Sennheiser probably isn't a great choice. As for Bose, they probably wouldn't be a bad choice, but they do a lot more than headphones and their market cap is $20B, quite a bit more than the $3B we are being told for Beats.
MichaelGG 12y ago
I read a thread on Reddit where someone discovered that disabling the "enhanced audio" feature just screwed up the driver EQ system (setting "treble" all the way up and "bass" all the way down).

paul_f 12y ago

$3.2B? I don't get this at all. What exactly does Apple get out of the deal? (1) Their brand is much stronger than Beats. (2) They could design and build high quality headphones if they wanted, the design is quite simple. And (3) if they wanted a music subscription service, they could easily create one of their own.

dragonwriter 12y ago
> if they wanted a music subscription service, they could easily create one of their own. Actually, they have one. (iTunes Radio) Of course, the fact that this has to be pointed out to someone arguing how strong Apple's brand is relative to Beats might illustrate the value they get from buying Beats better than anything else.
- paul_f 12y ago
  My understanding is iTunes radio is Pandora, not Spotify. Big difference. One is Internet radio, the other a true music subscription service.
  - baddox 12y ago
    They've got iTunes Match and iTunes radio, which are both similar to but just slightly to either side of Spotify.
    - leemcalilly 12y ago
      I use iTunes Match and iTunes radio, and still use Spotify to be able to search and play any song I want without having to buy it.
    - justinreeves 12y ago
      I'd say more than slightly. Spotify's main draw is that you can search for the song you want to listen to, and you can hear that song. iTunes match works off your own personal collection, and Radio is just like Pandora. Neither allows you to look for things you don't own and listen to them.

oneeyedpigeon 12y ago

Does this mean we're about to get a new iPod classic? 1,702 days and counting ... [1] [1] http://buyersguide.macrumors.com/#iPod_Classic http://buyersguide.macrumors.com/#iPod_Classic

orkoden 12y ago
A great opportunity to revive the iPod Classic. iPod with Beats Audio

ChuckMcM 12y ago

"Apple is in talks to acquire Beats Electronics for about $3.2 billion, according to a person briefed on the matter." I guess there is some disagreement about whether or not Beats is "worth" $3.2B. Such stories, on the eve of an acquisition, are always about trying to get the price raised it seems. Would be interesting if Apple walks away from the deal at this point.

MaysonL 12y ago

If this comes to pass, I will have to agree with those who have been saying that Cook should be canned.

winslow 12y ago

In my eyes, this paints Apple as just another "big company" making acquisitions that don't make sense. Maybe they are going to bundle all ipods with beats...? Not sure where they are going with this unless it's for the music service licensing agreements.

Tyrannosaurs 12y ago
Which would be great if the iPod wasn't a decline market. They can put them in with iPhones (adapted to include hands free) but I'm not sure how much that would influence people to buy an iPhone over something else.
gregsq 12y ago
Reading through these comments, the thought of Apple bundling beats with devices scares me the most. Ironic that if I acquired another one of their devices, i'd still have to throw their headphones into a draw to collect dust.

dylanhassinger 12y ago

i just got some beats earbuds. they are very clear, i like them

doe88 12y ago

As I see it it's not for the hardware, but for the streaming service and for Jimmy Iovine and his connections/knowledge in the music industry. I don't know how he could fit with Eddy Cue but I think Jimmy Iovine would bring a lot if he was in charge of the music services in iTunes.

paul_f 12y ago
Wait until Tim Cook realizes he actually bought Jimmy Iovine's company and not Jony Ive's company. Hilarity sure to ensue.
leemcalilly 12y ago
Apple saved the music business with iTunes. Why do they need Jimmy Iovine's connections? I don't see why they need Jimmy Iovine for anything.
- doe88 12y ago
  Because he is the music industry, because maybe the now mighty Apple has lot of difficulties securing licensing music rights, especially in the streaming area. Now I don't say it's worth 3.2bn$ (I don't think it's even worth 1bn$) but at least I think there is more value there than with the headsets. Anyway spending so much on such a shallow thing would send a wrong signal in my opinion, for the same amount I would have bought AMD or something more significant hardware related.

nashashmi 12y ago

So where does that leave HTC? They own 50.1% stake. They need cash pretty quickly. And I think they would continue to want implementing Beats audio in their phones. Btw, HTC One audio sound quality is emotionally exhilarating. (Tears)

paul_f 12y ago
HTC sold their shares in Beats a while ago. They don't own any now.

37prime 12y ago

Roughly about 17% of WhatsApp price tag. Should make us ponder...

gmisra 12y ago

The history of Beats is itself fascinating: http://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-how-monster-lost-the-world http://gizmodo.com/5981823/beat-by-dre-the-inside-story-of-h...

pcurve 12y ago

I think this is pretty damaging to the Apple brand. I'm afraid this will end up costing Apple more billions down the road as it creates uncertainty about their growth strategy.

bobbles 12y ago

I really think people are underestimating the streaming service they could be acquiring here. Currently even as an iTunes Match subscriber, if I hear a song on iTunes radio I still need to go and purchase the song if I like it. Potentially the deals Beats currently have mean I could just tag that song as one I like, and each time I listen to it some amount of revenue is split between the label and Apple. Acquiring beats would undoubtedly mean they also acquire their licencing contracts, which seem to have been traditionally difficult for Apple in the past.

pohl 12y ago
Even if they're not interested in the subscription service model, there may be something here that can improve iTunes Radio's song selections: "The service uses a personalization system combining recommendations based on listening habits and algorithms with human curation and playlists from music professionals, including other "guest" curators, such as Rolling Stone, Rap Radar, and Pitchfork. Song searches prioritize the original, master recordings of songs over other versions (such as covers). A feature known as "The Sentence" allows users to generate playlists by filling four blanks in a sentence with words describing various activities, moods, and genres." http://en.wikipedia.org/wiki/Beats_Music http://en.wikipedia.org/wiki/Beats_Music
pbreit 12y ago
Actually, it's extremely doubtful the licensing would transfer during an acquisition to Apple.

jackgavigan 12y ago

I'm puzzled by this. If it's about a streaming service, why not acquire Spotify? Could it be about patents? Beats got custody of all the intellectual property when they divorced Monster. https://www.google.com/?tbm=pts&hl=en#aq=f&aqi=&aql=&hl=en&q=%22Beats+Electronics+LLC%22&tbm=pts https://www.google.com/?tbm=pts&hl=en#aq=f&aqi=&aql=&hl=en&q...

robg 12y ago

If true, seems like a submarine into wearable technologies. Apple building mood sensing tech for personalized streaming service is a bit creepy. Apple adding mood sensing tech to a huge, young, existing, user base is broadly exciting. H/T: https://news.ycombinator.com/item?id=7718083 https://news.ycombinator.com/item?id=7718083

abalone 12y ago

This makes even less sense than the Square acquisition rumor. 1. Apple has the tech and library to do their own subscription service if they want to. You think they can't do their own licensing deal? They surely don't need to pay $3B to acquire someone else's. 2. Apple wouldn't want to operate a cross-platform service. They'd pay a huge premium to acquire a bunch of Android customers than they'd promptly purge. Plus, it'd probably invite anti-trust scrutiny. 3. The argument about Beats headphone quality is moot. Even if it's more than just marketing / bass-heavy EQ, Apple would not pay $3B to acquire headphone technology. None of that makes any sense at all. I have to believe someone thinks Beats and Square are interesting to Apple because their products have a certain superficial Apple design aesthetic. But it makes no sense from a business model standpoint. Or maybe Apple's doing some kind of next-level mole hunt here to level-up on secrecy.

jcampbell1 12y ago
> You think they can't do their own licensing deal? When you are the richest guy in town it is hard to negotiate a good deal. It is probably much smarter to just buy Beats. If they bought Spotify, they would be stuck supporting Android and Windows customers. The $3B price probably reflects the current profitability of the headphone line. For what it is worth, audio brands seem to have staying power. I am not sure if the quality criticisms are a positive or negative value signal personally.
- Scorponok 12y ago
  Other services (like spotify) have tended to have clauses in their licenses saying something like "If you get acquired, the deal is cancelled and you have to renegotiate it" so that the record companies can prevent exactly this from happening. I would be surprised if Beats doesn't as well. That means that it doesn't matter if Apple (or anyone else) buys someone who already has a deal - the previous terms go away and the record companies get to start the negotiations all over again.
  - Braveatom 12y ago
    True, but if they have a system ready to roll and are in a good negotiation position (iTunes is effectively a monopoly) it puts a lot of pressure on the labels to sign

Braveatom 12y ago

The major labels have a love/hate relationship with iTunes. It brings in loads of cash, but it's a monopoly and the majors have little to no control (on price and promo, compared to retail). So I wouldn't be surprised if the labels are being somewhat difficult to Apple about streaming rights - they'll dominate, and once again the labels lack control. This deal could get round that somehow? Add to that that I think the labels have vested interests in Spotify and very favourable deals, (while cautious of the streaming model) and it makes sense to not let another player in just yet, especially one like Apple. Apples service is one that'll ride roughshod over everything, installed instantly on 100's of millions of devices with an iOS update - Sounds like a good use of their money to get that sooner rather than later. I haven't used Beats headphones but if their tech could be used to perceivably improve idevice's and laptops built in speaker audio it's a win there too. I'll believe it when I see it though.

kepano 12y ago

Fun fact: Beats' industrial design lead is Robert Brunner, Jony Ive's predecessor as Director of Industrial Design at Apple.

beltex 12y ago
Interesting. Brunner tried to hire him several times apparently. https://www.youtube.com/watch?v=GqJVHe6LN4E https://www.youtube.com/watch?v=GqJVHe6LN4E http://en.wikipedia.org/wiki/Robert_Brunner http://en.wikipedia.org/wiki/Robert_Brunner

morkfromork 12y ago

Beats Music has the worst mobile apps.

pbreit 12y ago

Looks like this thread has been downmodded. Why?

k-mcgrady 12y ago

The comments in this thread are similar to the comments in any Facebook related post on HN. Arrogant. People who likely haven't used the product for more than a few minutes have a concrete opinion on it. You may think Beats suck but they sell $500m of headphones per year. People clearly like the sound they produce even if you think it's shit and overpriced.

cheald 12y ago
Beats was made popular by the Monster Cable marketing machine, who is specifically known for selling well-marketed overpriced crap. Claiming that they're good because they sell is silly.
- k-mcgrady 12y ago
  It depends on how you define 'good'. They may not be good for listening to certain genres and they may not have a very balanced sound which a lot of audiophiles desire, but the sound they produce is clearly a sound people want and that is proven by how well they sell. They are not an impulse purchase, they are ridiculously expensive. If people really hated the sound most of them wouldn't buy Beats even with the marketing and fashion aspect.
  - w1ntermute 12y ago
    > the sound they produce is clearly a sound people want Most people are easily fooled when it comes to audio quality and have no idea what sound they "want", so they have to judge the quality of the product on the basis of marketing/branding and design instead. That's exactly what's happening with Beats. And it is entirely sustainable because (in the mainstream) headphones are first and foremost a fashion accessory, and neither Beats wearers nor the observers are know a thing about what good audio quality is. As long as they look hip wearing Beats in the eyes of mainstream observers (a phenomenon that doesn't show any signs of abating), it'll continue to fly off the shelves. As someone else commented above, the job of quality headphones is to reproduce the recorded signal as faithfully as possible - a flat frequency response. If you want enhanced base (for example), that should be done in the software equalizer, before the signal gets fed to the hardware. On an objective level, the audio quality of Beats blows. There's simply no other way to put it. Of course, this is all irrelevant to the unwash^H^H^H^H^H^Huneducated masses.

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thomasf1 12y ago

I could see one way that would make sense: To fix the iPhone 5C debacle. You want to reach lower level customers without tarnishing your main brand... Beats could fit that profile. Just make the colors a bit brighter and the successor to the 5c cheaper. Or sicking with the beats brand (style over quality): Why not use 4s internals ;)?

thomasf1 12y ago
Now, what works better? iPhone 5c http://www.extremetech.com/wp-content/uploads/2013/08/iphone-5c-color-options.jpg http://www.extremetech.com/wp-content/uploads/2013/08/iphone... - or - Beats 5c http://i60.tinypic.com/103hnjb.jpg http://i60.tinypic.com/103hnjb.jpg

NicoJuicy 12y ago

For all the people that think its worth it. HTC bought it for 300 million, they sold it as they had no use. Their in the same market as Apple (and with Sense / HTC, they also could use a music broadcast service). They sold it. Now Apple wants to buy it at a much higher level... Doesn't make any sense.

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hadoukenio 12y ago

12 hours after being posted: Ctrl-F: user acquisition Zero results. Look at the last couple of massive acquisitions e.g. Facebook buying companies that made little revenue which made even less sense. Most of the big ones I can think of were for user acquisition and not product/technology. This seems like the same type of play.

bruceboughton 12y ago
Apple was recently boasting of having nearly 800mn credit cards-enabled iTunes accounts. Doesn't seem to me they are short of users. Also, Apple is primarily a hardware + associated services company. They're not interested in getting users that aren't Apple hardware owners.

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OWaz 12y ago

It's weird how this April Fools article about Apple buying Beats [1] doesn't seem ridiculous right now. http://lefsetz.com/wordpress/index.php/archives/2014/04/01/apple-buys-beats/ http://lefsetz.com/wordpress/index.php/archives/2014/04/01/a...

scelerat 12y ago

...because music is the next big thing on the horizon? Does Apple have an answer to Nest? To Tesla? To Comcast? I understand Beats is a powerful brand, with a youthful and enthusiastic customer base, and they've entered the streaming space with some panache. Apple already knows how to do music. Is this what they're focusing on? It seems like a distraction and not a terribly advantageous one.

epo 12y ago

Apple make very smart acquisitions and have a track record in creating markets where others have failed to do so. They are also good at spotting opportunities in existing markets. That said, I think this is a deception to get Samsung to do something costly and stupid.