Apple's Purchase Of Beats Is About Sharing Music

May 8 2014, 7:28pm CDT | by

If the news reports are correct, Andre Young could become a very rich man. Mr. Young is, of course, known as rapper and record producer Dr. Dre, who six years ago co-founded Beats Electronics, now the reported subject of a $3.2 billion purchase by Apple Inc. If true, it would be Apple’s largest acquisition to date, and one that immediately sparked speculation about what Apple would really gain from the purchase. The Financial Times reports the sale could be announced as early as next week.

First, Beats markets a premium line of consumer headphones, earphones and speakers. But more importantly for Apple, the company holds patents on certain software technology, and operates a subscription streaming music service that could help Apple’s iTunes service expand in reach and quality.

The Apple retail stores have been selling the Beats headphones with the “b” logo almost since their invention, and have scored substantial space on the stores’ wall shelving. In fact, according to the privately-held Beats, it has a 51 percent share of the $1 billion premium headphone market (over $100). Beats COO Luke Wood has even claimed the company created the market for premium headphones back in 2008. Some of Beats over-the-ear models are priced at $450, while earphones are priced down to $90.

Beyond the headphones and earbuds, Beats has partnered with Chrysler to offer its technology across select models, including the Fiat line. The company describes it as “a high-definition music experience the way the artist intended.” The technology could dovetail nicely with Apple’s just-introduced CarPlay product and their future plans to become more active in the automotive marketplace.

However, the biggest asset of Beats would be the company’s streaming music service, which offers a much more thorough—and successful—social experience than iTunes. It’s advertised as “The right music for right now,” using a very simple interface crafted especially for the mobile experience. Using the Beats iOS app, the user simply creates a “sentence” explaining where they are, what they’re feeling and who they’re with. Beats then creates a playlist of the appropriate music. There are also additional paths to finding music, including by genre, artist playlist and curator. Once your music is playing, there are additional options to follow artists and explore their work, share playlists and comment on music.

And lastly, and quite frankly, there’s no streaming music service so close to the “the scene” than Beats. Incorporating the Beats technology into iTunes could generate a entirely new list of subscribers for the service, which now has over 800 million accounts.

Interestingly, the Beats music app is available for Android and Windows smartphones, and in a version for desktop computers. It’s not clear if Apple would maintain the apps for the other smartphone brands once the purchase is finalized.

The company has had an on-again, off-again relationship with various investors and funding partners over the years. However, given the size of the reported purchase and Apple’s corporate seriousness, Beats’ financials and ownership must be in-the-clear enough for Apple to act. And Apple’s executives must be thorougly convinced of how Beats’ products will improve iTunes—and their bottom line.

 
 

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

Suffering from bipolar disorder? Practice yoga
New York, Sep 18 (IANS) Yoga practice may yield significant mental health benefits for people with bipolar disorder, a survey study suggests.
 
 
Insulin pumps capable of saving lives: study
Vienna, Sep 18 (IANS) According to a study, the use of insulin pumps to improve therapy for Type 1 diabetes patients has provided positive results, including saving lives of patients.
 
 
Facial paralysis increases risk of prejudice
New York, Sep 18 (IANS) People may hold a prejudice against those with facial paralysis simply because they cannot communicate in the universal language of facial expression, says a study.
 
 
NASA spacecraft set for Mars orbit insertion Sep 21
Washington, Sep 18 (IANS) NASA's Mars spacecraft is nearing its scheduled insertion into the Martian orbit Sep 21 after completing a 10 month interplanetary journey of 442 million miles.
 
 
 

Latest from the Network

Romanian PM files for presidential candidacy
Bucharest, Sep 18 (IANS) Romanian Prime Minister Victor Ponta has filed his candidacy for the presidential elections in Nov. "I hope and wish to conclude 25 years of transition from dictatorship to a democratic,...
Read more on Politics Balla
 
Majority rule out re-election of French president
Paris, Sep 18 (IANS/EFE) Nearly nine out of 10 French people do not want President Francois Hollande to win another term in office in the next elections set for 2017, according to a survey released by Paris-Match...
Read more on Politics Balla
 
First NATO body launched in Bulgaria
Sofia, Sep 18 (IANS) Bulgarian President Rosen Plevneliev has inaugurated the first NATO body in the country. The International Organisation Crisis Management and Disaster Response Centre of Excellence (CMDR COE) has...
Read more on Politics Balla
 
Australian police detain 15 terror suspects
Canberra, Sep 18 (IANS) Police in Australia Thursday detained 15 people on terrorism-related offences during the biggest counter-terror raids in the country. More than 800 police officers conducted searches at 25...
Read more on Politics Balla
 
Pharrell Williams believes in aliens
Pharrell Williams believes in alien life. The 'Happy' hitmaker thinks people are ''incredibly arrogant'' and ''pompous'' if they don't believe there are extra-terrestrials in the universe. Speaking to Stylist magazine,...
Read more on Celebrity Balla
 
George Clooney's parents have wedding gift dilemma
George Clooney's parents don't know what to buy him as a wedding gift. The 'Monuments Men' star - who is worth a rumoured £100 million - will marry human rights lawyer Amal Alamuddin at the end of this month but Nina,...
Read more on Celebrity Balla
 
NASA spacecraft set for Mars orbit insertion Sep 21
Washington, Sep 18 (IANS) NASA's Mars spacecraft is nearing its scheduled insertion into the Martian orbit Sep 21 after completing a 10 month interplanetary journey of 442 million miles. The team, the flight system...
Read more on Apple Balla
 
Liam Neeson writing script with Bono
Liam Neeson is writing a movie script with Bono. The actor has been working with the U2 singer on the story for the last ''six years'' and he is very excited about the project. Neeson revealed: ''We chat, or with him a...
Read more on Movie Balla
 
Qatar vows to improve condition of immigrant workers
Berlin, Sep 18 (IANS/EFE) Qatari Emir Sheikh Tamim bin Hamad bin Khalifa Al Thani has vowed to promote reforms improving the condition of immigrants working on infrastructure for the 2022 Soccer World Cup that will be...
Read more on Politics Balla
 
Food poisoning leaves 320 people sick in China
Beijing, Sep 18 (IANS) At least 320 people in China have been hospitalised due to suspected food poisoning, health officials said Thursday. According to the officials, most of the patients, aged three to 18 suffered...
Read more on Business Balla