What Would Make Apple Pay $3.2 Billion For Beats Audio, Facebook Perhaps?

May 8 2014, 6:40pm CDT | by

Word, now confirmed by the Financial TimesBloombergThe Wall Street Journal, and The New York Times, that Apple is in talks with Beats Audio about an acquisition to the tune of $3.2 billion is surprising only because of the price.null null . And iTunes Radio is far from a Spotify or Pandora killer, so the new Beats Music streaming service could bolster it and declining iTunes sales.

But for a company that was valued at $1 billion at the time of the Carlyle Groups investment of $500 million last September,null . Apple has never spent a billion buying another company, something that rivals Google and particularly Facebook can’t say. Facebook, in particular, stacks up as a likely suitor. It has been on a spending spree of late, swiping up WhatsApp for $17 billion and Oculus VR for $2 billion. And it could be said that it got into the big-spending picture back in 2012 when it acquired Instagram for $1 billion (which now seems almost reasonable.)

And, like Apple, Facebook has a cool problem. Instagram and WhatsApp were both attractive because of their teen appeal. Beats would bring not only youth but some amount of urban street cred as well. And Facebook has never had the really tight linkage with music that Twitter and especially Myspace have enjoyed.

But Beats is really much better aligned with Apple than any other tech company I can think of. Both have succeeded at launching product line after product line that are a cut above its major competitors in both quality and price. Iovine claims having had a tight rapport with Steve Jobs and even pitching him on a streaming service a decade ago. That man is money!

And the new Beats Music service has been well-received for its innovative approach to curation, thanks in large part to creative director Trent Renzor. The Nine Inch Nails frontman turned go to soundtrack composer (The Social Network is particularly apropos here) could well become an important part of Apple’s brain trust along with Dre and Iovine. Despite Apple’s investment in music sales stemming form Jobs, the subscription and streaming models are growing and direct music sales are declining. Tim Cook must be loyal to both the past and the future.

In a way, Apple may need Beats more than it needs the Burberry marketing brass or the host of medical technologist it has recently hired. For an iWatch to be a hit, it will have to be cool, and headphone tech has certainly been a test ground for wearables. Maybe Apple can get Run DMC to do its next ad campaign?

– – – – – – – – – – – – – – – – – – – –

To keep up with Quantum of Content, please subscribe to my updates on Facebook, follow me on Twitter  or add me on Google+.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

2016 NASA asteroid mission awaits your messages
Washington, Sep 3 (IANS) NASA has invited the public to submit short messages and images on social media that could be placed in a time capsule aboard a spacecraft to be launched in 2016 for an asteroid study.
 
 
Indian-born scientist wins prestigious US award
Washington, Sep 3 (IANS) India-born scientist Dr Thomas John Colacot has won the American Chemical Society's ACS Award in Industrial Chemistry, one of the top honours in the field.
 
 
Cannabis could be as addictive as drugs
New York, Sep 2 (IANS) As more people are able to obtain and consume cannabis legally for medical and, in some states in the US, recreational use, people are less likely to perceive it as addictive or harmful. But a research study proves otherwise.
 
 
New sensor to detect tiny, individual nano-particles
Washington, Sep 2 (IANS) In a major breakthrough, a team of researchers has developed a new sensor that can detect and count nano-particles, at sizes as small as ten nano-metres, one at a time.
 
 
 

Latest from the Network

Watch your diet to reduce diabetes risk
London, Sep 3 (IANS) What you eat and drink, and not just the number of calories, is a significant factor in diabetes risk, a study showed. Losing weight may be good but not enough to prevent Type 2 diabetes as...
Read more on Celebrity Balla
 
35 militants killed in Afghanistan
Kabul, Sep 3 (IANS) At least 35 Taliban militants have been killed in fresh military operations across Afghanistan, the interior ministry said Wednesday. The Afghan National Security Forces (ANSF) carried out...
Read more on Politics Balla
 
Vince Vaughn for The Politician?
Vince Vaughn is set to star in 'The Politician'. The 'Wedding Crashers' star is attached to take on the lead role in the upcoming Columbia comedy about a scandal-hit politician, according to The Hollywood Reporter. The...
Read more on Movie Balla
 
910 militants, 82 soldiers killed in North Waziristan
Islamabad, Sep 3 (IANS) At least 910 militants and 82 Pakistani soldiers have been killed in operation Zarb-i-Azb in North Waziristan, the military said Wednesday. The statement issued by the Inter-Services Public...
Read more on Politics Balla
 
'Headscarf instils positive body image in British Muslim women'
London, Sep 3 (IANS) British Muslim women who wear a hijab (headscarf) generally have a more positive body image, are less reliant on media messages about beauty ideals and place less importance on appearance than...
Read more on Celebrity Balla
 
Console games new threat to global climate: Study
New York, Sep 3 (IANS) Console games downloaded over broadband internet are causing more greenhouse gas emissions than Blu-ray discs delivered via retail stores, new research reveals. It is not always true that...
Read more on Celebrity Balla
 
Human greed driving species towards extinction: Study
Washington, Sep 3 (IANS) In a disturbing trend, scientists have reported that species are becoming extinct as much as 1,000 times more frequently - 10 times worse than the previous estimates - owing to human population...
Read more on Politics Balla
 
Kelly Brook's traumatic childhood
Kelly Brook has opened up about ''violent and horrific'' memories from her childhood. The 35-year-old actress has revealed that although she enjoyed some aspects of growing up on a council estate in Kent, South East...
Read more on Celebrity Balla
 
Emmy Rossum not 'easy'
Emmy Rossum insists she's not ''easy'' like her 'Shameless' character. The 27-year-old actress stars as Fiona Gallagher in the US remake of the hit series and she's revealed that although she's had sex on a first date,...
Read more on Celebrity Balla
 
2016 NASA asteroid mission awaits your messages
Washington, Sep 3 (IANS) NASA has invited the public to submit short messages and images on social media that could be placed in a time capsule aboard a spacecraft to be launched in 2016 for an asteroid study. Called...
Read more on Apple Balla