Ondrej Holzman Apple has confirmed that it is indeed set to make its biggest acquisition in history. For three billion dollars (60,5 billion crowns), Beats Electronics, which is known for its iconic headphones, will acquire a music streaming service and, last but not least, influential connections in the music world.
Apple will pay $2,6 billion in cash and $400 million in stock for Beats Music, a subscription-based music streaming service, and Beats Electronics, which makes not only headphones but also speakers and other audio software.
The two most important men of Beats are also going to join Apple - the rap star Dr. Dre and seasoned negotiator, music manager and producer Jimmy Iovine. Apple is not going to close the Beats brand, on the contrary, it will continue to use it even after the acquisition, which is a completely unprecedented step that has no parallel in the history of the Apple company.
Just Dr. According to many, Dre and Jimmy Iovine should have been Apple's main target, as both have very good connections throughout the music industry, which could make the California company's position much easier in various negotiations, whether it should be about its music streaming service, but also for example about video, Iovine is moving in this area as well. He is now to leave his position as chairman of the record company Interscope Records after 25 years and together with Dr. Dre, whose real name is Andre Young, will join Apple full-time.
Here's to the next episode. #applebeats pic.twitter.com/GaHy1G84xF
- Beats By Dre (@beatsbydre) May 28, 2014
Iovine revealed that the two will work in the electronics and music streaming divisions, and will seek to bridge the technology and entertainment industries. Iovine said their new positions will be called simply "Jimmy and Dre," so neither will likely sit in Apple's top management, as has been speculated.
"It is a sad fact that there is practically a Berlin Wall built between Silicon Valley and LA," commented Apple CEO Tim Cook on the acquisition, referring to the connection of the two worlds, that of technology and show business. "The two don't respect each other, they don't understand each other. We think we are getting a very rare talent with these gentlemen. We like their subscription service model because we think they're the first to get it right," enthuses Tim Cook.
“Music is a very important part of all of our lives, and it also has a special place in our hearts at Apple. That's why we're constantly investing in music and bringing these extraordinary teams together so we can continue to create the most innovative music products and services,” added Cook, who did not yet specify how exactly the rapprochement of the two companies – Apple and Beats – will take place. For now, it looks like both competing services, Beats Music and iTunes Radio, will coexist side by side. Beats Music will now fall under the control of Eddy Cue, while Beats hardware will be controlled by Phil Schiller.
"I always knew in my heart that Beats belonged to Apple," Jimmy Iovine, a longtime friend of the late Steve Jobs, responded to the biggest purchase in Apple's history. "When we founded the company, our idea was inspired by Apple and its unsurpassed ability to connect culture and technology. Apple's deep commitment to music fans, artists, songwriters and the entire music industry is extraordinary.”
It is expected that the entire deal should close with all formalities by the end of the year.
– so fingers crossed :)
Interestingly. The combination of a company that creates first-class products in every way (Apple) with a company that sells good-looking sub-average to average products (the so-called polished misery). The "Apple-inspired idea" is very hard for me to find in Beats. Rather than an ideological consensus, I suspect Apple of pure pragmatism, which is "stealing" the background of the Beats Music service, which will give birth to a streaming music service under Apple's baton (Apple is well aware that sales on iTunes are going into the background and the future is streaming). And those poor headphones? They probably take it as a broth on the side, which will certainly not freeze at the end of the accounting period.
as an entrepreneur, you would act exactly the same. the future really is in streaming music. and if someone already has the entire background for sale, why not use it for acquisition. moreover, right here where they get 2 semi-important people on their side. The fact that instead of Apple earpods you will find Beats in a box may make you as an audiophile cold, but a lot of young people who look at the image and audio comes second may be attracted to Apple. moreover, if they want to pay a subscription of 6E per month for a stream from beats, they will pay back their investment in no time. as far as I know, there are 600M (maybe more, I'm not entirely sure) active iThings, and with China those numbers will grow, and if even 1/10 would use the stream, that's 360M euros/dollars per month. They get their investment back in 8 months.
However, I agree with Apple's decision, it's certainly not a bad move. I just wrote what I think about the whole acquisition. It's not even surprising that Apple will keep the Beats brand, because it doesn't want to have so much to do with their headphones :) If they will be bundled with Apple devices as a default accessory, I'm not sure, I rather think not. In any case, the know-how around Beats Music + certainly also the connections mentioned in the article is important for Apple.
What makes you say that the audio from the beats is worth the money? Although I only own one pair of in-ear buds, I definitely consider myself an audiophile and the reproduction is slightly better than in-ears from Apple, not to mention EarPods. I tried Pro and Studio once and I have to say it was a massacre across genres.
Well, I don't consider myself an audiophile, rather an ordinary listener-amateur who has already listened to something and can compare. Also, I've yet to see an audiophile with 100% Beats marketing product on their ears, so I'd put the brakes on that audiophile :) What makes me say that Beats is worth the splurge? By listening. But if you consider rumbling in low frequencies and a blanket on everything else to be "massacre across genres", then I have nothing to add and you might be the target. Beats are headphones whose price does not even remotely reflect the sound quality, an estimated 3/4 of the price is paid for the advertising placebo Dr. Dre. Studios have headphone sound for 1 to 2 thousand. CZK, while the sound quality for which you will pay 5 thousand at manufacturers such as Audio-Technica, AKG, Shure, etc. CZK and more, Beats can't even offer you, because they simply don't carry such a product. Classic headphones from Apple and EarPods follow the trends of ordinary cheap phone accessories, I wouldn't look for quality there either.
agreement. beats headphones are really worthless. but if you listen to RNB, hiphop, rap, etc. and some DNB, then they are ideal. they have really strong dense bass. Dre also made them mainly for his ears.
Well, probably some "decent section" ;-)