& cplSiteName &

Apple Buying Beats for $3.2B: Dr. Dre & Tyrese

Sarah Thomas
5/9/2014
50%
50%

Apple is reportedly ready to spend $3.2 billion to buy Beats, AT&T's streaming music partner, according to several sources, including Dr. Dre himself.

The owner of Beats hinted at the acquisition in a "video selfie" with the actor Tyrese posted Friday morning. Dr. Dre said he was set to become the "first billionaire in hip hop." And Tyrese posted the clip on Facebook (since removed) with the caption: "Dr Dre ON THE night his deal went public that he did with Apple 3.2 BILLION!!!!"

Forbes pointed out that the deal would actually net him around $800 million but still would make him hip-hop's richest man.

Hip-hop hierarchy aside, the deal is notable because, for one thing, it will be one of the largest acquisitions in Apple Inc. (Nasdaq: AAPL)'s history, showing what a big bet it is placing on streaming music. It's also potentially good news for AT&T Inc. (NYSE: T), which revealed just yesterday that it's considering shutting down Cricket's Muve Music, likely in favor of its partner's service. (See Apple iTunes Radio Brings the Beat to LTE and AT&T to Turn Down Muve's Music?)

Jefferies analyst Peter Misek also suggests that the deal could help Apple out in the emerging category of wearables. He writes in a research note:

Apple would also gain what we believe is an amazing creative team for the design and creation of hardware, primarily accessories that we believe could be very valuable in the context of the wearables market. We believe such a team could help the development of a future iWatch and other wearable products from Apple. Those two assets and capabilities alone may be worth the purchase price.

Misek also wrote that this could jumpstart competition in the music business with a response from Amazon.com Inc. (Nasdaq: AMZN) and Google (Nasdaq: GOOG). For example, he suggests that Spotify could be an attractive acquisition target for Amazon.

All this activity could really kickstart a once-stagnant mobile music market. But it remains to be seen if that's a positive or negative thing for wireless operators, which might gain either partners or competitors for streaming services.

— Sarah Reedy, Senior Editor, Light Reading

(35)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 4   >   >>
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/17/2014 | 4:43:46 PM
Re: Confusing
iPhones and iPads are amazingly rugged gadgets. I've dropped 'em, the dog licks them, the cat thinks they're toys, and they just keep going. 

Some people put theirs in cases to keep them looking new. I like the nicks they accumulate over time. They're like a good, worn leather jacket. 

 
Mitch Wagner
100%
0%
Mitch Wagner,
User Rank: Lightning
5/14/2014 | 3:43:27 PM
Re: Confusing
Appearance of quality is more important than actual quality. Skeptics would say that's been Apple's strategy from the beginning. 

And Apple has always been as much about fashion as engineering. Apple would use the words "style" or "design" instead of "fashion."

Good point regarding the Burberry executive. That combined with the Beats acquisition (has that been confirmed yet?) suggests Apple is going after market segments: Doubling down on a traditional segment of affluent adults, while also pursuing a younger, more hip demographic. 

The fact that I used the word "hip" demonstrates I am not. 
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
5/14/2014 | 3:15:35 PM
Re: Confusing
I'm not so sure that the price difference between the 5C and 5S is the big problem. I think the 5C just *looks* bad and cheap compared to the 5S -- and so people aren't willing to compromise their fashion and also get a slightly less functional iPhone. Beats is genius in a way because the electronic guts of their products are objectively inferior -- but somehow they've convinced a lot of people that their products are worth more than the sum cost of the components. Apple could do well if it can pull this off with other electronic wearables it might have in the pipeline. I think it's also interesting that Apple has a new exec from Burberry -- so it's definitely thinking about how to market it's products as fashion items instead of utility gadgets.
kq4ym
50%
50%
kq4ym,
User Rank: Light Sabre
5/14/2014 | 12:31:11 PM
Re: Confusing
It's just amazing to me how the "youth" market is growing so large that Apple wants to (and and afford) to buy Beats for $3.2B. All of my friends love all kinds of music they say, adding "except rap" so obvioiusly it's not by peers spending anything on Apple's new toys. But, if you've got the money and want to move your products to a younger crowd, that's probably the way to head.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
5/13/2014 | 1:34:33 PM
Re: Confusing
mhhf1ve - I wonder whether the iPhone 5C suffers simply from being insufficiently less expensive than the 5S. The 5C starts at $99 subsidized, the 5S at $199. Considering the consumer is also paying monthly phone charges, the consumer may decide that buying the underpowered phone for not that much less is false economy. 

Apple may be buying Beats not for its design sense in general, but for its appeal to a younger demographic than Apple's existing customer base. 
mhhf1ve
50%
50%
mhhf1ve,
User Rank: Light Sabre
5/12/2014 | 7:20:02 PM
Re: Confusing
Some folks speculate that apple isnt so focused on the headphones as much as Beats' "fashion" sense in wearables. I'm not sure I buy that reasoning, though, because it's tough to see how oversized watches or fitbit-like devices couldn't be done by Apple's existing designers. But I guess I can understand that Apple's designers are optimising for how the internal mechanisms fit into a box (usually in a minimalistic way), not how to necessarily make a really fashionable accessory. I suppose this is Apple's first step away from its usual minimalistic design. I wonder if Beats had designed the iPhone 5C -- would it be more popular now?
Mitch Wagner
100%
0%
Mitch Wagner,
User Rank: Lightning
5/12/2014 | 5:23:38 PM
Re: Confusing
Apple may well keep the Beats name around. It'd be the first time in a long time that Apple has used another brand. The last times were Filemaker and Claris, and that's ancient. 

As I think about it, I think Apple did this for several reasons:

- Short-term market share and profits. 

- Earphones are an integral part of the smartphone experience. It's like a keyboard or a mouse for a notebook or desktop. 

- Buying marketing smarts for a younger generation. 

- Possibly buying connections to the music industry. 

- Buying a streaming service. Even if the market share is small, the underlying service might be sound. Siri was a niche application when Apple bought it. 
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
5/12/2014 | 4:03:14 PM
Re: Apple Audio Connectors
If Apple really wants to lead in digital audio innovation, it would be investing in projects like Neil Young's Pono.
wanlord
50%
50%
wanlord,
User Rank: Light Sabre
5/12/2014 | 3:54:39 PM
Apple Audio Connectors
I can "hear" it now, pun intended. Proprietary Apple High Fi Digital Audio connector interfaces between Apple devices and Apple Beats audio to provide the "quality patented Apple audio experience"...
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
5/12/2014 | 3:42:15 PM
Re: Sorry, HTC
The bigger issue with sound quality is the source rather than the device. Compressed digital files are not going to yield very high fidelity. We've gotten used to digital and are willing to accept lesser quality as a trade-off for convenience, ubiquity, portability, etc.
Page 1 / 4   >   >>
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
Flash Poll
Live Streaming Video
Prepping for the Future: Upskill U Explained
During this short kick-off video, Doug Webster, Vice President of Service Provider Marketing, Cisco, and Light Reading’s CEO & Founder Steve Saunders give an overview of Upskill U.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
LRTV Huawei Video Resource Center
UBBS 2016 Highlights

5|12|16   |     |   (0) comments


Highlights of Huawei's UBBS event in Hong Kong.
LRTV Huawei Video Resource Center
European 2020 Digital Agenda

5|12|16   |     |   (0) comments


Anacom's Fatima Barros discusses the plan to bring ultrafast broadband to Portugal by 2020.
Upcoming Live Events
May 24-25, 2016, Austin Convention Center, Austin, TX
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
WiCipedia: Short Skirts & Back-Up Plans
Eryn Leavens, Special Features & Copy Editor, 5/20/2016
Nokia Plays It Smart With Major Mobile Devices Brand Deal
Iain Morris, News Editor, 5/18/2016
Ingenu Revs Up IoT Rhetoric
Iain Morris, News Editor, 5/18/2016
Google Doubles Down on Machine Learning, AI
Mitch Wagner, West Coast Bureau Chief, Light Reading, 5/19/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
The Takeover Begins Click Here
It all started when Mittens taught himself how to use the Internet.
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.