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Video appears to confirm Apple-Beats; Iovine reportedly set to join Apple

  • In a Facebook video posted by actor Tyrese Gibson, Beats co-founder Dr. Dre appears to confirm (with colorful language) his company is getting bought by Apple (AAPL) for a large sum.
  • Separately, the NY Post reports Beats' other co-founder, music industry legend Jimmy Iovine, is in talks to join Apple as a creative "special adviser" to Tim Cook.
  • Questions are flying about Apple's intentions for Beats, and whether the deal represents a big strategy change. While Apple has bought plenty of component, software, and services firms over the years, it has shied away from acquiring established electronics hardware brands in favor of a do-it-yourself approach. Also, audiophiles generally aren't huge fans of Beats' headphones.
  • At the same time, Beats, as a consumer brand known for premium pricing, a loyal customer base, and simple/iconic design, has more than a few things in common with Apple.
  • Music industry sources tell re/code Beats is doing over $1B/year in sales. The site also speculates Apple is interested in Beats' streaming service - Billboard reported in March Apple is talking with labels about a subscription streaming service, and is thinking of offering an iTunes Android app.
  • Apple -0.4% premarket. Pandora (P) -3.2%; the company is no stranger to selling off on reports of Apple music forays.
Comments (39)
  • Patent News
    , contributor
    Comments (1321) | Send Message
     
    looks like an anti-trust issue. but what anti-trust?

     

    how many deals have been stopped besides tmobile att?
    9 May, 07:59 AM Reply Like
  • Ugly Duckling
    , contributor
    Comments (236) | Send Message
     
    How is this anti-competitive? Vertical integration is not a Sherman issue.
    9 May, 08:44 AM Reply Like
  • kmi
    , contributor
    Comments (4018) | Send Message
     
    Every single tech blog and analyst is trashing this deal...
    9 May, 08:04 AM Reply Like
  • Justin Jaynes
    , contributor
    Comments (3146) | Send Message
     
    everyone is trashing it because beats are horrible. apple is a premium product - beats are an overpriced and horrible headphone.

     

    if apple acquired Sennheiser, Beyerdynamics, even Audio Technica - awesome!

     

    There are tons of startups that make some really good headphone DACs, like the UDAC-2 or 3 USB DAC. Seems to me like a company like nuforce would make sense. Acquire an audiophile grade electronics company and stick the components directly in your iPhone and laptop.
    9 May, 08:57 AM Reply Like
  • thotdoc
    , contributor
    Comments (1597) | Send Message
     
    Good. That makes it a good decision.
    9 May, 10:36 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3816) | Send Message
     
    Totally agree. I won't be compelled to buy an Apple products because it has a "Beats" system in it. In fact, that's just a name. 99% of the components are the same in 99% of other audio equipment made in the exact same factory in China.

     

    The entire aura surrounding Beats, was Dr. Dre. Now that he will no longer be affiliated with the brand, the brand dies.
    9 May, 10:47 AM Reply Like
  • JD in NJ
    , contributor
    Comments (893) | Send Message
     
    How about Grado? Now there is a manufacturer producing at a high enough quality level.

     

    That being said, I've purchased only Sennheisers in recent years and they're excellent headphones.

     

    Beats? Please.
    9 May, 11:13 AM Reply Like
  • mscottbone
    , contributor
    Comments (54) | Send Message
     
    It is not about the headphones, near as much as it is about the streaming service.

     

    BEATS has already negotiated terms with the record industry. Apple has not. 3.2b is nothing to avoid the legal proceedings that kept iTunes radio from market for an extra two or three quarters.

     

    Every quarter they spend negotiating is another quarter for Spotify's head start.
    9 May, 11:19 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3816) | Send Message
     
    That is an angle I didn't know about, I will look into Beats further. That is probably the angle they want...not the crappy speakers.
    9 May, 11:48 AM Reply Like
  • Justin Jaynes
    , contributor
    Comments (3146) | Send Message
     
    Agree if it gets apple a bigger audience for streaming. I know HTC has some beats branding for their smart phones, but I can't really imagine grabbing beats audio is a power play to prevent others from using it.

     

    Good point about the streaming - I also didn't know about that one.

     

    @JD - Grado's are really good too, and Shure. Tons of audiophile grade options to choose from. You can even get Sennheiser's with polished wood accents. Now those are classy lol
    9 May, 12:36 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (3816) | Send Message
     
    I think of Beats as an overpriced Coby knockoff...I would NEVER pay $200 for a pair of headphones. Unless they were noise cancelling Bose or something like that, professional grade.

     

    I just bought Panasonic ear buds for $6.99 at ROSS, couldn't be happier.
    9 May, 01:08 PM Reply Like
  • manicdvln
    , contributor
    Comments (698) | Send Message
     
    If you pay 1k for a stupid iphone, you would easily pay 200$ for stupid headphones
    9 May, 01:27 PM Reply Like
  • dnorm1234
    , contributor
    Comments (914) | Send Message
     
    >Unless they were noise cancelling Bose or something like that, professional grade.

     

    If you think Bose are "professional grade", then Beats are right up your alley.
    9 May, 04:31 PM Reply Like
  • Matthew Davis
    , contributor
    Comments (3816) | Send Message
     
    I dont want to beat anything up my alley, no way.
    10 May, 12:24 AM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11107) | Send Message
     
    They are trashing it because its sad to see a top brand buy a top brand. Where is the synergy? What is the problem? The top brand can't carry its own weight to the point it needs to buy another brand? And lastly, why should a tech company that prides itself on premium quality buy a brand that has sub par audio quality? Is it that desperate to keep its audio marketshare now than no one buys iPods anymore? It still won't kill MP3s or MP4s.
    10 May, 10:17 PM Reply Like
  • db313706
    , contributor
    Comments (213) | Send Message
     
    Not understanding this one... I've tested the hardware, on more than one occasion, and IMO they are some of the worst headphones I've ever tried for the price charged.

     

    If they've got loyal customers, I suppose... I just cannot understand why. I'd rather purchase a pair of Sennheiser or Audio Technicas any day, and I tell that to as many people as I can if they really want a quality product.
    9 May, 08:24 AM Reply Like
  • manicdvln
    , contributor
    Comments (698) | Send Message
     
    Pandora is down because this deal proves that Pandora is grossly overvalued. And that the pipe dream of ever being bought out is now gone.

     

    Pandora is a 6$ stock at best!
    9 May, 08:32 AM Reply Like
  • pagreen1966
    , contributor
    Comments (588) | Send Message
     
    Just goes to show how much $AAPL has changed. This never would have happened 5-10 years ago. What other 'brands' will $APPL acquire. I heard they were interested in moving into the automobile business so perhaps Aston Martin might be on the cards!
    9 May, 08:39 AM Reply Like
  • diaboliqueguan
    , contributor
    Comments (388) | Send Message
     
    glad that Tim Cook is the one heading AAPL.
    9 May, 09:50 AM Reply Like
  • jhooper
    , contributor
    Comments (5741) | Send Message
     
    I would rather they get into car audio. I would love an Airplay option for a car stereo system. I get in, and presto, my in car screen suddenly looks mostly like my phone screen, but altered for more hands free and eyes on the road. Then all my playlists, map addresses, contacts, etc are the same in the car with a similar interface.
    9 May, 04:15 PM Reply Like
  • manicdvln
    , contributor
    Comments (698) | Send Message
     
    Beats is already in cars
    9 May, 07:30 PM Reply Like
  • jhooper
    , contributor
    Comments (5741) | Send Message
     
    I'm waiting for an iCar stereo, like a beefed up Pioneer.
    9 May, 07:45 PM Reply Like
  • Glenway Fripp
    , contributor
    Comments (953) | Send Message
     
    Did you watch that video? First of all, it made me even more convinced that the Apple acquisition is a rumor because those guys are a bunch of loud mouth idiots! I just can't see them being "hip" to Tim cook and Apple's secrecy/low key thing and visa versa. Second of all, "where is the mention of Apple?". There is none! Dr. Dre just became a billionaire is what the video says to me! Somehow he made it all work .. Respect... But Apple? Wow! Strrrrrretch.... LOL
    9 May, 09:01 AM Reply Like
  • Glenway Fripp
    , contributor
    Comments (953) | Send Message
     
    Hmmmmm. ridiculous video aside, one has to remember Dr. Dre and Co. have a bad boy image to uphold. He doesn't want to alienate his fans by appearing to be a corporate boy hence the video. He must have some serious funk in the trunk to have built a billion dollar company. Maybe sitting down with the man, for other than a can of beer, you would see a whole other animal. His product may suck but that doesn't mean his business does... Would I bet $100 that Apple buying Beats is another stupid rumor? No........
    9 May, 09:26 AM Reply Like
  • chriff
    , contributor
    Comments (87) | Send Message
     
    Just 2 thoughts on this deal:

     

    1. Beats headphones are crap, but so are the headphones that come with Apple products and many iPod/iPhone users seem happy to use those to blast music into their ears.

     

    2. $3B for a company that already does $1B in revenue annually ain't bad when you think about Facebook spending $19B on a company that does maybe $100-200M in revenue. But I guess Facebook can happily spend investors' money as Zuck pleases, while Apple should never spend any of the money it earned by selling products.

     

    That said, I still hope it's just a rumor.
    9 May, 09:14 AM Reply Like
  • psychological-dividends
    , contributor
    Comments (720) | Send Message
     
    Very interesting, isn't it?

     

    I have no idea where this will work, but I do know people are intensely frustrated with headphones and how they break, malfunction, etc. and maybe would reach more and pay more for "quality"? But I'm not they have anything that a competitor can closely approximate.
    10 May, 02:52 PM Reply Like
  • ptnyc
    , contributor
    Comments (49) | Send Message
     
    While I'm not happy about the price, I think this may be a very smart move and possibly be spurred on by the new Burberry CEO hire. Let's face it, the smartphone market is maturing very quickly and conspicuous high-end accessories are where the margins are. In NYC where I live, just walking down the street, I see about a quarter of the under 30 set, wearing these headphones--men and women alike and they seem to wear them as much for fashion as to escape from the world in music. The brand has a very loyal following and a cool cachet, both great things for Apple to leverage. I don't know which phones must of these hipsters are using, but Apple knows that if they bring them on board, they will find plenty to buy in the giant ecosystem.
    9 May, 09:23 AM Reply Like
  • Justin Jaynes
    , contributor
    Comments (3146) | Send Message
     
    Here's the actual video and quote from the video:

     

    http://bit.ly/1s9V6eY

     

    Quote from the article:
    "We doubt that some premature bragging is enough to scuttle the deal, which some analysts say seems like a questionable choice for the tech giant. But maybe a team of lawyers somewhere just gets nervous anytime they hear "s*it just changed."

     

    I hope everyone realizes Tyrese Gibson is an actor, and not everything on the internet is real. That video looked more like those guys having fun
    http://bit.ly/1s9V6LY
    9 May, 09:28 AM Reply Like
  • Matthew Davis
    , contributor
    Comments (3816) | Send Message
     
    Stupid acquisition, overpriced to be sure. Just as the Beats fad is fading too.
    9 May, 10:36 AM Reply Like
  • manicdvln
    , contributor
    Comments (698) | Send Message
     
    At least company makes money while all Facebook acquisitions never made a dime and probably never will.
    9 May, 02:26 PM Reply Like
  • pocohonta
    , contributor
    Comments (567) | Send Message
     
    If they are buying Beat for their headset, then I will have some "colorful language" of my own about that !! Maybe Dr. Dre will be the spokesperson for Apple.

     

    But if they are buying it because it is 3x gross sale, then that is a bargain because of the synergy between Apple's distribution channel and Beat's premium brand image.
    9 May, 10:54 AM Reply Like
  • fleveneur
    , contributor
    Comments (20) | Send Message
     
    I believe this is a stupid move from Beats owners.
    Facts:

     

    1- Apple usually acquires companies in their infancy which provide great values to Apple. Sorry but I don't see any here. What is Apple going to do with ok headphones?
    2- Streaming music: If there was 1 music streaming company to buy it would be Spotify which has a great product.

     

    3- These types of acquisition are usually announced by professional sources, not through an instagram / Facebook video. If there was a deal in place, Apple would probably cancel it as this video post shows how immature and unprofessional they are.

     

    The only reason i see they would buy Beats is to "beat them", and kill the company.

     

    Wearables. Are you kidding. Since when Beats does wearables?
    Wearable has not even started yet. A watch that tell you the weather, oh my, that's going to help us a lot.

     

    As for Beats headphones, i got one pair as a gift. I never used them. Too much bass, frequency range is limited. I still prefer my Sennheiser.
    9 May, 11:18 AM Reply Like
  • u01bsb0
    , contributor
    Comments (627) | Send Message
     
    So many people are slamming this deal because they think dr dre beats is just headphones.

     

    Its streaming service and car integration is what really matters.
    9 May, 02:19 PM Reply Like
  • bgold1955
    , contributor
    Comments (2032) | Send Message
     
    Perhaps wearable too.
    9 May, 04:39 PM Reply Like
  • Derek A. Barrett
    , contributor
    Comments (3534) | Send Message
     
    Sure Beats headphones are considered overrated by audiophiles, and have quality issues, but that is besides the point. They make a ton of money and have a huge brand presence, and are a fashion statement. The "cool" factor alone blends in well with Apple's designs. Isn't that what Apple has always been about?

     

    A large number of consumers seem to like these headphones, and on top of that you are getting a streaming service with a personalized algorithm to compete with Pandora. Pandora is the first thing I download whenever I get a new device.

     

    Apple's maps was pretty bad too when it was first released, but it has improved by leaps and bounds, so much so I've ditched Spyware Maps - I mean - Google Maps.

     

    Considering products like the iPhone revolutionized engineering, reliability, and usability standards, it will be interesting to see if Apple also addresses the quality issues here as well.

     

    I personally use Audio-Technicas (and Sennheisers before that), entry level gear, and found the leap up from store brands pretty phenomenal. However, I've spent hours reading the audiophile forums over the years and have come to the conclusion that a lot of users there simply are never satisfied with ANYTHING unless it's a $1,000 set being driven by another $1,000 of hardware.

     

    As far as Dr. Dre having to uphold a bad boy image, that went out the door a decade ago, he's already been partnering with HP for years now.

     

    The guy is a very smart business man and knows where the market is. What he did with his crew of artists was pretty amazing, just look at how much money Eminem and Snoop Dogg pulled in.

     

    The guy is a cultural icon whose work has weaved its way into the fabric of society, on same level as Coca-Cola, Michael Jordan, and yes, the Apple iPhone.

     

    He puts his name on something and it's almost always guaranteed money.
    10 May, 02:39 AM Reply Like
  • duck fan
    , contributor
    Comments (38) | Send Message
     
    Can't beat Koss vintage ,
    10 May, 02:24 PM Reply Like
  • psychological-dividends
    , contributor
    Comments (720) | Send Message
     
    It's difficult to understand for me, but I have never had much luck guessing Apple's pathway forward.

     

    How is the beats purchase more than fad-pursuing and social status-Veblen goods type purchase? This is clearly a win for Dr. Dre, who Apple can bless with billionaire status. A win for Apple, yet again I don't know.
    10 May, 02:50 PM Reply Like
  • Mortonk
    , contributor
    Comments (167) | Send Message
     
    They're buying Beats for the futuret content that Lovine will provide with the streaming, content is what it's about with music and TV..!
    11 May, 03:56 AM Reply Like
  • mayalar2012
    , contributor
    Comments (20) | Send Message
     
    It is not about the headphones. It is really about the streaming! $10/month to compete with Spotify. That's a lot of revenue.
    12 May, 06:24 AM Reply Like
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