It’s all over but the dried ink, the crying, the drinking, and the cashed checks. Apple, according to the latest reports, plans to buy Beats Electronics, the fast growing company founded by hip-hop producer and rapper Dr. Dre, and recording industry legend Jimmy Iovine.
Whatever Apple does in a very public way comes under intense scrutiny and the purchase of Beats ranks as among the most noisy. $3-billion? What is Apple thinking? Less than a year ago Beats was valued at $1-billion and that came after a $500-million investment. What’s Apple know that nobody else knows?
Style Over Substance
Beats products are easily found lining Apple’s store shelves so it’s possible that Apple knows something about Beats’ potential that the rest of the world does not know.
Even with a price tag north of $3-billion Beats is still chump change for a financial behemoth with $150-billion in the bank (even after stock buybacks and dividend payments).
My perspective is rather straightforward. Beats headphones and speakers are slick looking, trendy, with decent quality but horribly overpriced eye and ear candy.
So, what does Beats have that Apple wants and needs but doesn’t have?
How about Beats Music, the subscription-based online music streaming service? Which started up in January of this year so it doesn’t have but a few hundred thousand subscribers.
Beats appears to be more about branding and image, fads and trends, and the ever present danger of style over substance.
Jonny and Jimmy
What Apple has going for it is the design acumen of Sir Jonny Ive, and with the Beats acquisition, Apple could also get Jimmy Iovine, the legendary darling of the music industry.
If Iovine stays at Apple he could bring to Apple a vision and the industry contacts needed for the next great wave of music and media products; vision obviously lacking in CEO Tim Cook and the crusty Eddy Cue.
In fact, from my perspective, that’s exactly what is going on. Beats is hip and trendy and on the rise. Apple is trying to buy what it can’t make for itself.
Now, look at some of Apple’s other recent hires. Angela Ahrendts, former CEO of the hip and trendy Burberry retail stores, now head of Apple’s retail business. Her reputation precedes here. Ahrendts is considered smart, technologically savvy, and a good leader.
Apple’s head honcho Tim Cook is surrounding himself with talented visionaries. Isn’t that worth a few billion dollars?