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Obvious? Maybe if the didn't have to pay anything for the company, it would be. But why is it obvious that this acquisition makes sense at that particular price
by adamlett 12y ago
Obvious? Maybe if the didn't have to pay anything for the company, it would be. But why is it obvious that this acquisition makes sense at that particular price? I'm not saying that it doesn't make sense, only that you have to at the very least consider how much the company is worth to Apple, before you declare it a no-brainer acquisition. Would it still make sense at $4B? $6B? How much would be too much before this is “obviously” a bad deal?
- InclinedPlane 12y agoBeats has a marketshare of something like 2/3 to 3/4 for headphones over $100 and annual revenue of about $1.4 billion in 2013 (1/6 of Facebook's revenue). If anything, $3.2 billion was a steal.
- epo 12y agoCitation required for such a handwavy assertion. Beats is a fashion brand and those are notoriously ephemeral. If Beats want to sell they may know the game is up, but then so would Apple.
- 001sky 12y agoCitation required for such a handwavy assertion Fashion brands M&A all the time> https://en.wikipedia.org/wiki/LVMH https://en.wikipedia.org/wiki/LVMH > LVMH is a classic, diversified example. Even apple is seen by many as a 'fashion accessory'> https://en.wikipedia.org/wiki/IPod_advertising#Silhouette_Style https://en.wikipedia.org/wiki/IPod_advertising#Silhouette_St... They ran an entire marketing campaign based on the gratuitious display of earphone cords !!
- adamlett 12y agoYou mention marketshare, but neglect to mention the size of the market. You mention revenue, but neglect to mention profits. For all your numbers tell me, Beats could be operating at a loss in a shrinking market. And I'm curious: If $3.2B was a steal, what would have been a fair price?