Saturday, May 10, 2014

Apple Inc. Said to be Buying Beats Electronics

Apple Inc. is reportedly buying Beats Electronic for $3.2 billion, which would be the highest amount of money spent on an acquisition in Apple's history. The biggest question being asked at the moment is not whether the deal will fall through but, what is Apple's reasoning behind this multibillionaire acquisition? Many music enthusiasts or even Apple enthusiasts would answer this with a simple statement: Apple earbuds, or Apple speakers in general, are low quality and Beats earbuds, or Beats anything for that matter, are high quality. The real answer actually lies in the realm of products that Beats Electronic offers and what Beats Electronic has done to essentially revolutionize the headphone industry.

Beats by Dr. Dre Studio headphones (picture from prior to 2012). After 2012, Beats Electronic LLC started manufacturing its products in-house rather than using Monster Cable Products Inc. for manufacturing.

The Beats Electronic company was founded in 2008 by rapper Dr. Dre and Interscope Records chairman Jimmy Iovine. The company's first product, Beats by Dr. Dre Studio headphones, debuted later that year. Prior to the emergence of this product, mainstream headphones were becoming a thing of the past as earbuds began to take hold in the mass market. However, the company's promotional tactics relied on celebrity endorsements and product placement. Soon after this marketing approach took hold, the company's popularity skyrocketed. Headphones were no longer soly used by outdated techies and studio music producers/musicians. In 2011, Beats Electronic reached around $500 million in annual sales. A few months ago, the company released a Spotify-like payed music streaming service called Beats Music that Apple may also be taking an interest in.

An Apple Inc. acquisition of Beats Electronic means that most Apple products can be equipped with superior audio technology. This also means that Apple gets the rights to Beats Music and can therefore incorporate it directly into iTunes. For anyone who enjoys listening to music or enjoys using Apple products in general, this acquisition, assuming it goes through, seems nothing short of awesome.