There’s so much controversy and buzz about the possible Apple buyout of Beats Electronics (Beats) that it’s almost like a new iPhone was on the way…
Joking aside, let’s face it though, USD $3 billion dollars is a heck of a lot of money. My good friend and superstar Malaysian entrepreneur, Timothy Tiah posted another Forbes link on the matter on my Facebook page and tagged me in it, questioning why Apple would do such a thing. I have other friends and followers online asking the same thing so I thought I’d write a post about it.
While it seems there’s lot of negativity online about the deal especially as Beats is considered inferior to the other audiophile-quality brands out there, I believe Apple very much knows what it’s doing.
Here are a couple of reasons that point to why the $3 billion investment may just be worth it:
7 Reasons Why Apple Buying Beats Is A Good Idea
- Beats currently holds 73% of the $100 and above headphone market
- Beats annual revenue now totals over USD $1 billion and its latest valuation was $1 billion
- Beats already has experience working with PC (HP) and smartphone (HTC) manufacturers. Speed to upscale and transition will be key.
- Apple will gain additional edge by incorporating Beats sound systems into its devices / wearables
- Apple’s devices become a bit more ‘fashionable’ with the striking red and black Beats gear
- Apple is better placed to dominate the wearable market with the combination of its current, and Beats, younger hip users
- Music has always been a big part of Apple’s business
The last four reasons focus on how Apple can especially benefit from a Beats acquisition. There are at least three significant pieces of Apple technology that can take immediate advantage of Beats sound systems, the iPhone, iPad and iWatch. While not the biggest deciding factor in smartphone purchases, quality of audio is still is one differentiator that counts.
With the hiring of key Nike Fuelband executives and most recently Nokia’s Chief of Photography, Ari Partine, Apple is purposefully building a formidable force for some exciting devices in the next couple of months. The Beats deal would just strengthen the potency of the mix. Not sure if there’s enough time to get that Beat bass in the iPhone 6, but looking forward to seeing it in future iPhones.
The numbers, combined with Apple’s roadmap present some good rationale that support a Beats buyout. I hope Apple finally decides to comment to provide the real story.