Five years ago, Apple announced its biggest acquisition: the purchase of Beats Electronics for $ 3 billion. At that time, the business of the manufacturer of headphones and speakers was on the rise, but since the acquisition, some turbulence has led us to speculate: was the investment worth it?
According to the editor of Engadget Billy Steele, yes. Naturally, Apple is not a point without a knot and, despite the slowdown in the expressiveness of Beats within the speaker market, Apple managed, with the acquisition, to give gas to another market niche: that of streaming of songs. To understand exactly how it happened, we need to go back in time.
How it all began
Beats was founded in 2006 by Interscope Records co-founder Jimmy Iovine and rapper / producer Andre Romelle Young (known as Dr. Dre). Originally, the brand focused on the production of headphones and speakers, and in 2012 the company held 64% of the market for over $ 100 of these accessories.
As the music industry moved into the era of streaming, Iovine and Dr. Dre noticed this change and entered this niche, in early 2014, with the Beats Music. The service, which emerged from the acquisition of another platform for streaming of music, MOG, focused on curating playlists and personalizing the musical style of each user – something that remained alive on Apple Music.
For Steele, the reason why the acquisition of Beats was worthwhile for Apple is precisely the fact that the entire “post-purchase” process was carried out with the creators of the brand, in the case of Iovine, Dr. Dre (in addition to the singer and producer Trent Reznor, who continues to work on the streaming of Apple music).
Working on their own, this could take years to build and even then, it might not have been as good as what they did with the help of Iovine, Dr. Dre, Reznor and others. Apple bought a company, conquered its assets and retained its talent to keep the work going as it often does. Five years later, business is booming, and this is somewhat casual in Cupertino.
Currently, Apple Music has more than 40 million subscribers worldwide and has already surpassed its biggest competitor, Spotify, in the American market. Of course, it’s not all about turning Beats Music into Apple Music; after all, Beats has a huge headphone and speaker business that Apple is keeping in its own way.
You should remember that in 2016, when Apple introduced the iPhones 7/7 Plus, Beats announced three options of headsets (Powerbeats3 Wireless, Solo3 Wireless and BeatsX) powered by Apple’s W1 chip, the same as AirPods.
Although Beats headphones have (legitimately) been criticized for abusing the bass and for the quality of the material used in manufacturing (which valued more for brand recognition than good design), in recent years this has changed.
More recently, with the launch of Powerbeats Pro, many users have identified with the product and praised the quality of the brand’s first truly wireless headset.
This is, as we said, the result of the partnership between the two companies (and their executives) over these five years. In this sense, in the same way that Apple benefited from Beats Music to bring its own platform to life, Beats also took advantage of Apple’s engineering and technology to leverage the quality of its products.
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Interested parties, reading the report of the Engadget is more than indicated.
via The Loop