Saturday, May 31, 2014

Apple To Acquire Beats Electronics

Apple to acquire Beats Electronics for USD3 billion, the largest purchase after NeXT in 1996 (for USD429 million). Beats co-founders Jimmy Iovine and Dr. Dre will join Apple.

Apple has been criticised for not having any break through products after iPad. In another words, Apple has no interesting product yet under after Tim Cook as CEO.

Apple has acquired many companies during pass few years, but are smaller company with advance technology and potential talents eg. P.A. Semi, Placebase, Siri, C3 Technologies etc. From here you will notice Tim Cook's strategy different from Steve Jobs.

What type of company is Beats Electronics that worth Apple to dig out USD3 billion from their pocket? Beats Electronics produce audio product which co-founded by Jimmy Iovine and hip-hop producer Dr. Dre (Andre Young).

The marketing line for the Beats Electronics products is "People aren't hearing all the music, ... with Beats, people are going to hear what the artists hear ..." Beats has earphone, iPod docking speakers, bluetooth portable speaker (and more). Beats' product normally label with "beats by dr. dre".

Beats founded at year 2006. In year 2011, Taiwan mobile phone manufacturer HTC acquired 50.1% stake of Beats with USD309 million. Later HTC sold their shares in Beats, the deal make Beats value at USD1 billion. HTC invest in Beats to use Beats technology in their mobile phones.

Those early products from Beats are manufacture by Monster. You will notice a lot of the Beats products are label with Monster. In year 2012, Monster break-off with Bears as contract end, and becomes a competitor of Beats.

Beats also works together with HP. HP use Beats Audio system in HP notebook, it can be identified with red character with black colour background. HP has a dedicated page for its Beats Audio products (check here). Will Beats Audio still be using at HP's notebook after Apple's acquisition? I doubt it. Altec Lansing (or other speaker companies) should be benefited from this.

Beats has a portable mini speaker product manufacture by China, the beatbox S10 series. The beatbox looks like the X-mini portable speakers, but much cheaper. The beatbox makes X-mini speaker just an over priced product. If X-mini don't improved, it going to be killed by beatbox soon.

After than earphones and speaker, Beats has online music streaming service, Beats Music. There are analysis saying that Apple acquire Beats to improve its music business, especially the online music streaming service.

Is Beats audio device good? It "looks good and sounds good", the Beats audio speaker is "loud and clear". Does Beats worth the USD3 billion? Let's see how it goes.

1 comment:

Cannan Charity said...
This comment has been removed by a blog administrator.