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Beats by Dr. Dre to be acquired by Apple for 3.2 Billion dollars.


Guest Worlds Within the Margin
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Guest Worlds Within the Margin

http://www.forbes.com/sites/briansolomon/2014/05/08/report-apple-closing-in-on-dr-dres-beats-for-3-2-billion/

 

So that was completely unexpected. In other news, Dr. Dre has just become a billionaire. I think this is the first time a musician has become a successful business man to this extent. Most Musicians are terrible at managing money. He might be a billionaire quite soon.

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On first glance this seems like an odd acquisition. I'd be very surprised if Apple bought them for the headphone technology as it is frequently mocked for being quite low quality for the money paid. Not to mention Apple has more than sufficient capabilities to create marvelous products. So then why does Apple want their streaming service? From the news the service isn't doing too well. Low six-digit numbers for paying subscribers. I think I read that iTunes purchases are declining slightly so getting into the streaming arena could help. But is this really the best way? And for $3.2 billion?? That's a lot of cashola (I know Apple has ~$150bn). Couldn't they build their own for less?

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everytime i see someone with these beats, I think they are suckers. It is basicly a big rip off . You can get headphones for less money with noticable better sound quality that are more durable. Same with that bose crap. Shows again that people are not rational agents like economists seem to think.

 

And funny thing is that if they would have priced them lower, those beats would have been a flop :D .

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Time for a stroll down NWA World: 

http://www.nwaworld.com/lyrics/

 

Man, I can't even repeat the stuff that is sad over there.  Way too culturally enriching.

 

This is a modern day minstrel show.  It is a disgrace.

 

Old white guys telling young black men how to be.  The irony is delicious.

 

The beats acquisition, if real, is probably a terrible idea.

 

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Time for a stroll down NWA World: 

http://www.nwaworld.com/lyrics/

 

Man, I can't even repeat the stuff that is sad over there.  Way too culturally enriching.

 

Well he's gone from "F-- the Police" to "F-- the Investment Taxes" in no time.

 

Both sentiments I would agree with as well.

 

I think the Beats acquisition makes sense for Apple. It is a profitable brand, it is an area that (besides earbuds) Apple isn't in, yet I'd bet most people with Beats are plugging them into an Apple product (either an iPad, iPhone, or iPod).  If Apple wanted to get into selling on-ear or over-ear head phones they would have to compete with Beats, who already makes a fashionable/cool product, Apple iHeadphones would look like a me-too product in that space.  And it's only $3B, so why not?

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Time for a stroll down NWA World: 

http://www.nwaworld.com/lyrics/

 

Man, I can't even repeat the stuff that is sad over there.  Way too culturally enriching.

 

This is a modern day minstrel show.  It is a disgrace.

 

Old white guys telling young black men how to be.  The irony is delicious.

 

Nothing wrong with a little NWA in the morning to get your day going, in my opinion.

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Time for a stroll down NWA World: 

http://www.nwaworld.com/lyrics/

 

Man, I can't even repeat the stuff that is sad over there.  Way too culturally enriching.

 

This is a modern day minstrel show.  It is a disgrace.

 

Old white guys telling young black men how to be.  The irony is delicious.

 

Nothing wrong with a little NWA in the morning to get your day going, in my opinion.

 

I've never liked the early 80's/90's rap very much, but I did love Ice-T's metal band "Body Count".  I still have "Cop Killer" on my iPod.

 

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Old white guys telling young black men how to be.  The irony is delicious.

 

The beats acquisition, if real, is probably a terrible idea.

 

Who is the old white guy?  I don't remember checking a box for ethnicity.

 

Dr. Dre is also older than I am!

 

Some things are right, some things are wrong.  Does not matter the age or culture of the person saying them.

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Dr Dre has been great at getting other rappers to promote these headphones so all of the kids and many young adults have been buying these over priced headphones. Now apple own them, is Jay Z, Diddy, Birdman or other going to start their own headphones brand? I bet apple have a plan to improve the headphones, but I wonder if they will appeal in the same way if the rappers are promoting some other headphones.

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Old white guys telling young black men how to be.  The irony is delicious.

 

The beats acquisition, if real, is probably a terrible idea.

 

Who is the old white guy?  I don't remember checking a box for ethnicity.

 

Dr. Dre is also older than I am!

 

Some things are right, some things are wrong.  Does not matter the age or culture of the person saying them.

 

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I was shopping for headphones recently and tried out the Beats By Dre, I thought they were just really bass-heavy.  This probably appeals to certain listeners of certain music and overcompensates for the lack of bass in your typical earbuds.

 

From one article I found: "Beats revenues increased fivefold between 2010 and 2012 alone, hitting the $1 billion mark.".  If Apple is paying $3.2 billion and revenues are say $1.25-1.50 billion (assuming some growth since 2012) this might be a perfectly good use of cash for them, that's something like 2-3x revenues for a great brand that is complimentary to their business and profitable.

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everytime i see someone with these beats, I think they are suckers. It is basicly a big rip off . You can get headphones for less money with noticable better sound quality that are more durable. Same with that bose crap. Shows again that people are not rational agents like economists seem to think.

 

And funny thing is that if they would have priced them lower, those beats would have been a flop :D .

 

in that case isn't it a perfect fit with Apple products ?  at least in terms of margins versus quality versus perceived value?  pretty much every luxury brand charges a non- rational premium right?

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Seems like a good value.  It has a moat.

 

"The luxe home in the gated Brentwood Country Estates is eco-friendly and includes eight bedrooms, a six-car garage, and a moat."

 

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