Apple's Beats acquisition is a bet in favour of streaming music

Apple General
#1

Jon Maples, on his blog:

It’s pretty clear that the download era is waning and Apple knows this better than anyone. I’m sure the company has a phalanx of data analysts poring over projections and understand that the rate that customers buy downloads might not be in a freefall, but it could be coming quicker than anyone expects.

The idea is that Apple wins either way — they buy Beats and streaming music completely takes over as the Next Big Thing, Apple wins because they now have their fingers in a lot of pies. They buy Beats and streaming music dies, well, they’ve still acquired a company with years of music industry experience and the potential for some big deals between themselves and the record companies.

(The talk regarding the music deals becoming null and void if the acquisition does proceed will be a discussion point for another time.)

What do we think? Looking beyond the simple acquisition of the Beats brand, was it about their hardware (I’ve never used Beats products, are they any good?), or was it about their (i.e. Jimmy Iovine’s) music industry prowess, a multi-platform music streaming platform, or something else?

Sidenote; I find it crazy that Australia is the only country outside of the US that has access to iTunes Radio.

#2

I honestly don’t know what to make of it. There’s basically four arguments to be made for Apple’s reasoning and they all make (some) sense.

  1. It’s for the headphones (let’s face it, EarBuds still aren’t that
    great)
  2. It’s for Beats Music (are the deals still void if it continues to
    operate as Beats Music rather than Apple Music?)
  3. It’s for the clientele and cachet (the stat being thrown around was
    that something like 70% of Black users in the US are on Android)
  4. It’s for something else that nobody has guessed

I could see a very plausible argument being made for any of them. Two things to factor in though: Tim Cook and Robert Brunner. Cook is an operations guy, so he knows supply and logistics. Maybe Beats have exclusive access to some kind of component or process Apple wants, or maybe it’s just a ready-made supply of vastly better headphones. Brunner is Beats’ industrial design lead, but his previous job was Director of Industrial Design at Apple - a post now held by Jony Ive. Maybe Sir Jony wants to design some headphones on the side…

#3

Wow. i thought all the major countries had iTunes radio.

I don’t understand why Apple would want to acquire Beats but Apple wouldn’t do it without a good reason. lets see what happens.

#4

Nope, only US and Australia. The fact that we’re ahead of the usual tier-one release countries (UK, and, uh, that’s about it) boggles the mind.

#5

Am I the only one who’s tried Beats Headphones and thought they were sub par and definitely not worth the money they charge?

This will also be interesting in relation to Telstra. As most of us probably know, Telstra is affiliated with Mog, and Mog has already regenerated into Beats in the US. Word was that Mog would turn to Beats locally as well, and continue to be quota free on the Telstra Network, but with this acquisition I wonder if any of that is likely to change. Will Beats likely merge with the iTunes store at some point? And if so what happens to Mog users? Sure Mog isn’t Spotify but being quota free was a big plus in it’s favour.

1 Like