It's been merely hours since news broke about Apple's (possible but reportedly imminent) acquisition of Beats Electronics but already the internet is abuzz. Once you get over the $3.2b price tag, one question lingers - why? Let's beak it down.
Apple typically acquires companies for three reason, the employees (acqui-hire), patent acquisition, or technology and manufacturing. Very rarely does Apple buy a company with the intentions of taking their product and slapping an Apple logo on it. Siri is one of few exceptions that come to mind, but that was integrated as a feature into the iPhone 4S, not as a standalone product. Take a look at this page and see for yourself.
Does Apple want to slap an Apple logo onto Beats headphones and call it a day? Not bloody likely. And that certainly wouldn't be worth $3.2b.
I'm not currently aware of any Beats Electronics' patents Apple would be interested in or could not design around. So I'll cross patents off the list.
Apple's earbuds are pretty good. Some people might tell you otherwise but they've come a long way since the first pair sold in 2001. For where I sit, Apple's Earbuds have a better reputation for build quality and price than Beats headphones. I have yet to come across clear evidence to declare a winner in sound quality. Some people prefer buds, some prefer over-the-ear headphones.
If Apple wanted to sell over-the-ear headphones, I'm sure they would have in the last 13 years. This acquisition is not about getting into the large headphones business although they could more easily now than ever. Other than sound quality (debatable), what Apple's earbuds are missing is wireless connectivity. Apple doesn't ship Bluetooth headphones. It's been a long-requested feature. But Apple's more than capable of releasing their own wireless earbuds and $3.2b certainly isn't worth the investment if that was the main reason.
From what I've seen, Beats headphones aren't made out of any unique materials and I'm assuming they're manufactured much the same way other headphones are.
But we're focusing too much on headphone hardware. Beats also supplies speakers for laptops and cars as well as their own earbuds. Can't think any of that would peak Apple's interests.
What Apple may be interested in is the (newish) Beats Music. It's a music streaming service that's better than a lot of offerings out there including Apple's iTunes Radio. Beats Music does a great job at song curation and it seems to be a hit with customers, especially those under 30. That's a key demographic that Apple has always needed to target, more important now if you consider Apple's near venture into wearables.
Beats has demonstrated that it knows how to build products and market them successfully to customers under 30. They can do it with wearables and with content. The thought of another company being as successful as Apple in their core demographic and with companion products likely doesn't sit too well.
Beats' employees, especially designers and marketers, would be an invaluable asset at this point considering the chatter about Apple's plans for wearable devices. Beats Music will likely be folded into new and existing iTunes software and services.
Some of Beats technology may make its way into future Apple headphones and Beats speakers may be in your next MacBook Air.
Say goodbye to the rest.
If this acquisition is factual and realized, say goodbye to this page. Oh, and this too.