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It was rumoured for weeks, but it’s now finally confirmed: Apple is buying Beats for $3 billion. When it was just a rumour, lots of Apple-watchers could scarcely believe it – the cultures of the two companies seemed so different, and people took to Twitter to say how bad Beats headphones are (like Apple has ever worried about having crap headphones before).
The first point, though, might be entirely intentional – Apple’s brand of cool is very different to Beats’, and it’s likely this will give Apple an understanding of, and access to, that different market. And as to the second, well, you can take your pick: the Apple elite might sneer at Beats headphones, yet they account for about 60% of the highend headphone market, but also the headphones business probably isn’t really what Apple cares much about.
The acquisition brings with it both the curated music streaming service Beats Music – which Apple can run concurrently with the iTunes Store and iTunes Radio, hedging its bets on the future of music – and a pair of executives who give Apple some valuable ‘ins’ in markets it needs help with.
The first of those new execs is Dr Dre, standing second from right above, between Apple CEO Tim Cook and Eddy Cue, senior vice president of internet software and services. Dre gives Apple some valuable credibility in the music business (both with the public and with others in the business).
But it’s probably Jimmy Iovine (on the left of this photograph) who’s the real get in this acquisition. He brings not only deep knowledge of and connections to the entertainment industry, but also an apparently unerring instinct for what will appeal to the mass market.
And while the price for Beats seems high, it represents Apple’s profits – profits, mind – for about a month.
This picture, incidentally, was taken at Apple’s current headquarters in Cupertino, but if you look closely, you can actually see a model for their huge new offices – dubbed ‘the spaceship’ – in the lobby below.