from Hacker News

Apple set to get Beats in $3.2B deal

by Reltair on 5/9/14, 2:13 PM with 75 comments

• by iambateman on 5/9/14, 4:44 PM

  Beats headphones are crap, sure. And their streaming service isn't as mature as Spotify. But three billion dollars isn't about headphones or online music streaming or Dr Dre's drunken celebration. It's about growth.

  Apple has a chokehold on the iPod market. They've rocked the market with the iPod, iPhone, iPad and those products will be cash cows for a long time. But where is their next growth going to come from? A watch? I doubt it.

  All the granola 16-year-old white girls already have their iPhone. There's no room for crazy growth among middle class white people. Apple needs to use it's expertise to pursue new markets, which is exactly what they're doing.

  Tim Cook isn't afraid, he's strategic. Beats by Dre is a high-end consumer lifestyle brand that GREATLY appeals to black, hispanic, urban-context, young men and women. They sell expensive products. They care about design. They represent a way of living. They're Apple in another market.

  Beats is about to be Apple's international foray into a completely new growth segment. And it's genius.

• by parasubvert on 5/9/14, 6:10 PM

  Beats Studio released a new model in 2013 that is significantly better than the 2008-2012 model. Beats is not "crap". Overpriced, perhaps, but there's not much competition to stop that.

  Reading the audiophile boards, the trends seems to be that the Beats Studio is now roughly competitive to the venerable Audio Technica ATH M50 , widely considered to be one of the most popular entry-level audiophile quality over-ear headphones. The main difference is not audio quality (the M50 probably has an edge here) but rather comfort and ear fatigue, with the Beats just being more comfortable.

  I love my M50s but admit they do lead to sweaty-ear.

  Examples:

  http://www.head-fi.org/t/683959/new-beats-studios-2013-vs-au... http://www.head-fi.org/products/beats-studio-over-ear-headph... http://www.head-fi.org/t/673273/new-2013-beats-studios http://www.head-fi.org/t/675031/new-redesigned-2013-beats-by...

  The main legitimate complaint about Beats is not that they're one of the two best sounding headphones under $300. It's that the market will bear that much of a price difference when the ATH M50 is $150. But, people will pay a lot for a wide selection of colours and a bit more comfort. And price can be seen as a feature.

  In short - Beats sells decent quality for its class, overpriced for what you get, but between comfort and colour selection, customers don't seem to mind. These guys will fit with Apple's philosophy well.

• by rwhitman on 5/9/14, 5:24 PM

  What Beats has in its corner, that Spotify doesn't, is a favorable relationship with the music industry, particularly the artists themselves. I've never used Beats streaming service but I was aware of it because of musicians like Trent Reznor plugging for it before it even came to market. Apparently they make deals where the artists get paid substantially more than Spotify. Beats is in a unique position to get music that other services can't, and could potentially have a monopoly on distribution of new releases from some major artists in a few years.

  Thats what Apple just bought here, I'm fairly certain they could give a hoot about the technology, its the artist relationships and favorable streaming contracts that they're after.

• by mavaso on 5/9/14, 5:50 PM

  Beats aren't that amazing, yet so many people wear them. My v-moda's cost $300 and have incredible sound. Worth every penny! http://www.amazon.com/gp/aw/d/B00A39PPDK?pc_redir=1399523882...

• by encoderer on 5/9/14, 5:35 PM

  If the deal closes, any guess on what happens to Beats Music?

  Doesn't seem to be room for that and iTunes radio (and iTunes itself) as separate brands.

  I think it will based on, eg, the Dr Dre video where he's bragging about it -- makes me think the deal is already done.

• by scelerat on 5/9/14, 6:10 PM

  This is not a snark at all: was there any more information in this clip that hasn't already been discussed in FT, NYT, etc. USA Today almost makes it sound like a done deal, but there's nothing substantial here that I can see.

• by epistasis on 5/9/14, 5:05 PM

  I'm not sure how much of any of this I believe until we have some word from Apple. Under the Jobs regime, such premature talk would have almost certainly spoiled the deal. We'll have to see how Cook responds to that.

• by DonGateley on 5/10/14, 8:03 AM

  Has anyone looked to see if Beats might have an interesting patent portfolio? Something perhaps to augment Apple's recently granted patent on bioinformatic earphones?

• by gdilla on 5/9/14, 5:22 PM

  Now samsung will buy Chambers by RZA [1]! j/k

  [1] http://wesc.com/chambersbyrza

• by taksintik on 5/11/14, 4:54 AM

  3.2 billion for an equalizer with deep brand recognition. AAPL must be swimming in cash.

• by msane on 5/10/14, 2:50 AM

  Please tell me this is bullshit.

• by bitwarrior on 5/9/14, 5:23 PM

  Billion is the new million.

• by canvia on 5/9/14, 5:14 PM

  Apple's next acquisition is going to be Monster Cable.

• by arjn on 5/9/14, 11:48 PM

  I dont understand this. I've never even heard of "Beats" before today. Does apple know something I dont ?