& 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
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
Women in Comms Introduction Videos
Nokia's Advancement Plan: Bring Old Skills to New Roles

6|29|16   |   7:57   |   (1) comment


Nokia's Sandy Motley advises women to change their mindsets; get aggressive about advancing their careers; develop strong, diverse support networks; and always bring forth learned skills to take on new challenges and different roles.
Between the CEOs
CEO Chat: Cisco's Yvette Kanouff

6|28|16   |     |   (0) comments


In Silicon Valley, Steve Saunders sits down with Cisco's Yvette Kanouff for an exclusive in-depth interview.
LRTV Interviews
Comcast: Prepping Next-Gen Video Services

6|28|16   |     |   (0) comments


In this LRTV interview, Comcast's Elad Nafshi outlines where MSO stands with cloud DVR, OTT video, college and gigabit services.
LRTV Custom TV
Energy 2020: Creating Unique Standards for Cable's Unique Networks

6|28|16   |   09:30   |   (0) comments


Cable's unique network requirements require a specific set of standards for operators to increase power efficiency, according to Dan Cooper, vice president of critical infrastructure for Charter Communications and chair of the SCTE/ISBE Standards Program's Energy Management Subcommittee, and Ian Oliver, managing director of the Trenchant Group and a member of the ...
LRTV Custom TV
Masergy: 'Now Is the Time for NFV'

6|28|16   |     |   (0) comments


Hear Ray Watson, VP of Global Technology at Masergy, talk about the advantages that enterprises can leverage using Network Function Virtualization (NFV), and how Masergy takes a unique approach to solving customers' problems. For more information on Masergy, please visit www.masergy.com.
LRTV Custom TV
Masergy Leads the Charge With NFV Capabilities

6|28|16   |     |   (0) comments


Hear Tim Naramore, CTO at Masergy, talk about how focusing on solving specific customer challenges, providing self-service automation tools and being laser focused on the customer experience has enabled Masergy to be a leader in the NFV space. For more information on Masergy, please visit www.masergy.com.
LRTV Custom TV
Private Company of the Year - Affirmed Networks

6|27|16   |     |   (0) comments


At BCE 2016, Steve Saunders speaks to Hassan Ahmed about Affirmed's success.
LRTV Custom TV
Energy 2020: Growing Services, Not Consumption

6|24|16   |   07:18   |   (0) comments


Management of power requirements needs to be a key consideration as cable operators deploy new services, says Dan Cooper, vice president of critical infrastructure for Charter Communications and chair of the SCTE/ISBE Standards Program's Energy Management Subcommittee. In this video, Cooper discusses the importance of cable operators and technology partners ...
LRTV Huawei Video Resource Center
Huawei & TDC First to Launch DOCSIS 3.1 Trial in Europe

6|24|16   |     |   (0) comments


To meet the rising demands for high-speed broadband and to tackle fierce competition for 1.5 million household, TDC wanted to upgrade its network to use the latest technology. Using Huawei's DOCSIS 3.1 solution, TDC is now able to offer gigabit speeds to its customers.
LRTV Documentaries
OPNFV Summit: Key Takeaways

6|22|16   |   03:28   |   (0) comments


MANO shortfalls, an increasingly bloated open source ecosystem and the cultural challenges for network operators were among the key takeaways from the OPNFV Summit in Berlin.
LRTV Huawei Video Resource Center
Bringing Ultra Broadband to the South Pacific

6|22|16   |   7:55   |   (0) comments


At Singapore's UBBS 2016 summit, Light Reading speaks to Lim Chee Siong, Huawei's CMO in the South Pacific Region.
LRTV Custom TV
Juniper's NFV Platform

6|22|16   |     |   (0) comments


A telco cloud is a key enabler for service providers to deliver virtualized services to their customers. Juniper has a differentiated approach with an open and comprehensive NFV platform to build the cloud of the future for multiple use cases.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
November 3, 2016, The Montcalm Marble Arch, London
November 30, 2016, The Westin Times Square, New York City
December 6-8, 2016,
May 16-17, 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
'Brexit' Vote Hits BT, Vodafone
Iain Morris, News Editor, 6/24/2016
Brexit: It's Hard to See an Upside
Ray Le Maistre, Editor-in-chief, 6/29/2016
Qualcomm Readies Lower-Band 5G Testbed
Dan Jones, Mobile Editor, 6/27/2016
Sigfox Said to Face Customer Backlash
Iain Morris, News Editor, 6/27/2016
Google Fiber Buys Webpass in Wireless Play
Iain Morris, News Editor, 6/23/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In Silicon Valley, Steve Saunders sits down with Cisco's Yvette Kanouff for an exclusive in-depth interview.
At the BCE 2016 show in Austin, ECI Telecom CEO Darryl Edwards tells Light Reading founder and CEO about the Elastic Network concept and the company's NFV and cybersecurity developments.
Animals with Phones
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.