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Unlike most Silicon Valley acquisitions, Beats has profits. They sell high-margin headphones with 60% market share of the over-$100 headphone market. Apple is g

by IBM 12y ago

Unlike most Silicon Valley acquisitions, Beats has profits. They sell high-margin headphones with 60% market share of the over-$100 headphone market. Apple is going to be getting into wearables, and this is the original wearable. They'll probably continue to run the unit separately because the brand is too valuable to just throw away. Audiophiles can pan the headphones as much as they want, it won't be any different from when PC geeks proclaimed they could build a PC with better parts for less without paying the "Apple tax". They aren't relevant. And if the margins are as high as some claim, Apple would have all the flexibility to improve the Beats line with better materials and construction. http://www.fastcompany.com/3015051/major-beats-beats-electronics-may-be-on-track-to-hit-14b-in-2013-revenue http://www.fastcompany.com/3015051/major-beats-beats-electro...

deleted 12y ago
[deleted]
- Schwolop 12y ago
  Pretty sure the OP meant headphones in general, not Beats specifically.
h4pless 12y ago
In regards to Beats' profits, I believe Beats, much like Apple, is a brand who's value is pinned largely to the guy who's at the head of the ship. With Apple, people knew that Steve Jobs had amazing stylistic and functional taste in products. Because nothing was produced while he was at the helm without first being approved by him, people could trust that each iteration of product line was something they would want by nature, the only question would be whether or not they wanted it enough to pay the premium. When Steve passed(RIP), Apple took a large hit to their product appeal (which I don't believe has yet been fully realized) because while Apple can still make high quality products, they don't have Steve Jobs, the guru of computer style, there to give his stamp of approval that not only is this the high quality product you've come to expect from Apple but it is also designed for use by humans and "cool". Next, Apple brought its tastes/decisions into question with the changes to the iPhone design and iOS, the introduction of the iPad mini... a lot of things that beg the question, "Would Steve have really gone for this?" Enter Beats by Dre, another brand that seems to have its value pegged to the guy who appears to be giving final approval to the products, so much so that he put his name is on all of his products. It has been confirmed that Beats makes great products, so people now trust the brand. They can go into the store and pick up the newest whatever by Beats and can rest assured that it's going to be not only very high quality audio, but it also has Dre's signature that the component ain't nuthin' but a G thang. Like you said, Beats has profits. There is no real reason for them to want to sell except that they want to get out while they're in a strong position. My guess would be that Dre feels that he's done enough good work and he wants to get out for a boat-load of money so he can start another venture or focus on making music. There's no real reason for Dre to stay with Beats if its acquired unless it's part of the deal, but if that was the case one would again wonder why the good doctor would be selling the company in the first place. But for Dre, even if he was to retire from the audio component game, his claim to fame would remain untarnished for producing nothing but ultra high quality products. I would imagine the stuff that was produced under him could become collectors items like vintage Nike sneakers. Without him at the head, I see the Beats profits going way down. It's also funny you bring up the PC/Apple grudge match as I see this acquisition as a deliberate play by Apple against its PC/Android rivals. Beats by Dre is/was a major feature for companies like HP(computer) and HTC(android). Beats bought out HTC's share of the company to end their partnership, but I'm sure Apple wants to include Beats to their feature list for iPhone and iPad. And HP is one of Apple's most direct competitors on the PC market. Beats is something that HP had that Apple didn't, it was one feature that could be better than Apple's comparative feature for all people knew. Well that's probably enough ranting so I'm just going to cut myself off. It's 9AM now, must work.

by IBM 12y ago

deleted 12y ago

[deleted]

Schwolop 12y ago
Pretty sure the OP meant headphones in general, not Beats specifically.

h4pless 12y ago

In regards to Beats' profits, I believe Beats, much like Apple, is a brand who's value is pinned largely to the guy who's at the head of the ship. With Apple, people knew that Steve Jobs had amazing stylistic and functional taste in products. Because nothing was produced while he was at the helm without first being approved by him, people could trust that each iteration of product line was something they would want by nature, the only question would be whether or not they wanted it enough to pay the premium. When Steve passed(RIP), Apple took a large hit to their product appeal (which I don't believe has yet been fully realized) because while Apple can still make high quality products, they don't have Steve Jobs, the guru of computer style, there to give his stamp of approval that not only is this the high quality product you've come to expect from Apple but it is also designed for use by humans and "cool". Next, Apple brought its tastes/decisions into question with the changes to the iPhone design and iOS, the introduction of the iPad mini... a lot of things that beg the question, "Would Steve have really gone for this?" Enter Beats by Dre, another brand that seems to have its value pegged to the guy who appears to be giving final approval to the products, so much so that he put his name is on all of his products. It has been confirmed that Beats makes great products, so people now trust the brand. They can go into the store and pick up the newest whatever by Beats and can rest assured that it's going to be not only very high quality audio, but it also has Dre's signature that the component ain't nuthin' but a G thang. Like you said, Beats has profits. There is no real reason for them to want to sell except that they want to get out while they're in a strong position. My guess would be that Dre feels that he's done enough good work and he wants to get out for a boat-load of money so he can start another venture or focus on making music. There's no real reason for Dre to stay with Beats if its acquired unless it's part of the deal, but if that was the case one would again wonder why the good doctor would be selling the company in the first place. But for Dre, even if he was to retire from the audio component game, his claim to fame would remain untarnished for producing nothing but ultra high quality products. I would imagine the stuff that was produced under him could become collectors items like vintage Nike sneakers. Without him at the head, I see the Beats profits going way down. It's also funny you bring up the PC/Apple grudge match as I see this acquisition as a deliberate play by Apple against its PC/Android rivals. Beats by Dre is/was a major feature for companies like HP(computer) and HTC(android). Beats bought out HTC's share of the company to end their partnership, but I'm sure Apple wants to include Beats to their feature list for iPhone and iPad. And HP is one of Apple's most direct competitors on the PC market. Beats is something that HP had that Apple didn't, it was one feature that could be better than Apple's comparative feature for all people knew. Well that's probably enough ranting so I'm just going to cut myself off. It's 9AM now, must work.