There's Only One Good Idea In The Apple-Beats Deal

May 12 2014, 10:46am CDT | by

Let’s get it out of the way first: if the reports Apple are in talks to buy Beats headphones are true, it’s insane, and it probably casts a pall on all of Tim Cook’s leadership.

Beats’ main asset is it’s brand. It’s got a great brand, and it’s a great business success. That’s how it can sell mediocre headphones and make fat margins. Again, more power to them. Great. But Apple is a one-brand company. Its strength is its brand. Taking on a new, separate brand makes absolutely no sense. And if Apple wants to fold Beats into its brand, why buy them in the first place? Why not just make its own headphones.

If Apple wants to make its own headphones, why not (as far as wearables go, it’s not a bad idea, especially given Apple’s longstanding interest in music), but, again, even if that’s the case, the Beats acquisition makes no sense. There is actually one company that makes amazing headphones with very impressive technology. It’s called Parrot, it’s French, and it’s led by a technology visionary.

Some people say the Beats deal is not about headphones, it’s about Beats’ streaming service and technology. But it makes no sense whatsoever either. Yes, Apple should definitely have its own Spotify-killer. But, again, no need to buy Beats. Is it about record label deals? All streaming rights deals include clauses that moot them in case of acquisition. Is it about the technology? If Apple can’t build technology that Beats can, it’s in a much worse situation than any of us think.

There is, however, one good idea in the Apple-Beats deal: and that’s making big acquisitions. 

Apple under Jobs never wanted to make big acquisitions. But every once in a while a disruptive or amazing new technology comes along that simply makes sense to own. Nest, for example, really should have gone to Apple–the deal probably couldn’t have happened as a result of clashing personalities, since its founder Tony Fadell had left Apple in bad blood, although who knows, since that was long ago. But Apple was probably never in the running to begin with. This even though the connected home is probably a better driver of long-term growth for Apple than smartwatches (think of when Apple marketed itself as the “digital hub” of your life). Another deal that Apple absolutely should have done was Israeli Maps maker Waze, but the suitors there were just Google and Facebook.

The technology landscape changes extremely fast, let’s face it Tim Cook is not the visionary that Steve Jobs was, and Apple has $100 billion in cash that it just doesn’t know what to do. It should make very big acquisitions.

Just not Beats.

 
 

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

NASA developing robot troops to explore alien worlds
Washington, Aug 27 (IANS) The US National Aeronautics and Space Administration (NASA) is developing a new troop of robots that could one day race across distant planets as a sort of space exploration vanguard.
 
 
How high altitude affects blood pressure
Washington, Aug 27 (IANS) In a significant find, an expedition to Mount Everest by Italian researchers has shown for the first time that blood pressure monitored over a 24-hour period rises progressively as people climb to higher altitudes.
 
 
Tragic fiction may leave you emotionally upset
New York, Aug 27 (IANS) Do you feel sad after watching a war drama or a documentary about a young person dying of a serious disease? Try reading less dramatic true stories instead.
 
 
A grand wedding, the key to a happy marital life
New York, Aug 27 (IANS) Call more guests to your wedding if you want your marital life to be successful.
 
 
 

Latest from the Network

Scarlett Johansson designs T-shirt for a cause
Los Angeles, Aug 27 (IANS) Actress Scarlett Johansson has teamed up with women's group, Planned Parenthood, to design a T-shirt for one of their fundraising campaigns. The 29-year-old has designed for the Planned...
Read more on Celebrity Balla
 
US confirms death of its suspected jihadi in Syria
Washington, Aug 27 (IANS/EFE) An American citizen was killed in Syria where he was allegedly fighting alongside jihadis of the Islamic State (IS), the White House said. "Douglas McArthur McCain was in Syria and we can...
Read more on Politics Balla
 
Leave Islamabad's protest venue: Pakistan SC
Islamabad, Aug 27 (IANS) In the second such direction, the Supreme Court of Pakistan Wednesday ordered the two parties leading anti-government sit-in protests to clear out of Islamabad's Constitution Avenue area by...
Read more on Politics Balla
 
Kanye West's father was paparazzo
Kanye West's father used to be a paparazzo. The 'Bound 2' hitmaker revealed his dad Ray West was a photographer during his deposition last year after paparazzi Daniel Ramos sued the rapper for allegedly attacking him...
Read more on Celebrity Balla
 
Sandra Bullock, Jennifer Aniston say farewell to Chelsea Handler
Sandra Bullock, Jennifer Aniston and Miley Cyrus were among the stars that joined Chelsea Handler on the final episode of 'Chelsea Lately' last night (26.08.14). The 39-year-old funnywoman - who quit the E! talk show...
Read more on Celebrity Balla
 
Harry Styles gets friendly with rising star Meghan Trainor
Harry Styles has ''good chemistry'' with his new female pal Meghan Trainor. The 20-year-old hunk has got close to the beautiful blonde singer after meeting her in the US during One Direction's 'Where We Are' tour, and...
Read more on Celebrity Balla
 
Johnny Galecki and Kelli Garner split
Johnny Galecki and Kelli Garner have split after more than two years together. The 'Big Bang Theory' actor and 'Pan-Am' star , who were first seen in public together in March 2012, have amicably decided to end their...
Read more on Celebrity Balla
 
Robin Williams rejected $600k Vegas offer
Robin Williams rejected a $600,000 offer to headline two Las Vegas shows two years before his death. The 'Mrs Doubtfire' actor, was found hanged at his home on August 11, turned down the chance to headline two shows at...
Read more on Celebrity Balla
 
Grand Theft Auto makers slam 'publicity-seeking' Lindsay Lohan
The creators of 'Grand Theft Auto V' want Lindsay Lohan to be fined for suing them. Manufacturer Take-Two Interactive has called for the 'Mean Girls' actress' complaint to be dismissed after she claimed they used her...
Read more on Celebrity Balla
 
Natasha Lyonne dating Fred Armisen
Natasha Lyonne and Fred Armisen are reportedly dating. The 'Orange is the New Black' beauty and the 'Easy A' star appeared to make their relationship official after they were spotted looking cosy with one another at the...
Read more on Celebrity Balla