5 ms·

I find the confusion over the Beats deal more surprising than the deal itself. Apple and Beats are very similar companies - both sell hardware that is relative

I find the confusion over the Beats deal more surprising than the deal itself. Apple and Beats are very similar companies - both sell hardware that is relatively cheap to make[0][1], and sell it at an incredibly high markup. Both companies are able to do this because they've built very recognizable brands. More importantly, Apple and Beats have very powerful brands in disjoint markets - the Beats brand is the strongest in the exact demographics where the Apple brand is the weakest. It makes total sense that Apple would want to purchase a high-end brand that allows them to expand into a domestic market in which they haven't yet reached saturation, all without "diluting" their brand. [0] http://appleinsider.com/articles/12/07/27/apples_iphone_twice_as_profitable_per_unit_than_ipad http://appleinsider.com/articles/12/07/27/apples_iphone_twic... [1] http://teksocial.com/socialblog/2012/5/13/exploiting-the-consumers-and-unscrupulous-profiting-an-inves.html http://teksocial.com/socialblog/2012/5/13/exploiting-the-con...

bgroins 12y ago
You've hit the nail on the head. Both companies excel at brand marketing and identification, which allows for huge markups and profits on what people perceive as high end devices. With both companies you're not just buying a product, you're buying into a culture, a lifestyle, and sense of belonging to an exclusive group of discriminating consumers. It seems like a perfect marriage between two companies with very similar business models.
jinushaun 12y ago
But, from where I'm sitting, Apple doesn't need Beats to succeed. It's buying into the past, not the future. Headphones is a mature market. Beats would've had to expand into other products to continue revenue growth. Lastly, Apple doesn't have a history of buying "cool" because it makes it. Buying cool is what dinosaurs like MS, HP and Dell do.

bgroins 12y ago

You've hit the nail on the head. Both companies excel at brand marketing and identification, which allows for huge markups and profits on what people perceive as high end devices. With both companies you're not just buying a product, you're buying into a culture, a lifestyle, and sense of belonging to an exclusive group of discriminating consumers. It seems like a perfect marriage between two companies with very similar business models.

jinushaun 12y ago

But, from where I'm sitting, Apple doesn't need Beats to succeed. It's buying into the past, not the future. Headphones is a mature market. Beats would've had to expand into other products to continue revenue growth. Lastly, Apple doesn't have a history of buying "cool" because it makes it. Buying cool is what dinosaurs like MS, HP and Dell do.