The ink on the $3 Billion acquisition of Beats By Dre by Apple is still drying. Rumors about the deal started earlier this month, when Tyrese Gibson (oh, Tyrese) posted and quickly took down a celebratory video of a clearly inebriated Dre boasting about the deal. Apple later confirmed that it intends to buy Beats Electronics which includes the Beats By Dre headphone line, Beats Music streaming service, as well as the swag (are we still using the word swag?) that comes with music legends and Beats Co-Founders Jimmy Iovine and Dr. Dre.
If the deal passes the Feds' approval, it should close in the Fall--making the acquisition official for a hefty $2.6 Billion in cash and $400 Million that will vest over time (Apple definitely has the dough between its proverbial couch cushions.) When the sale is final, Iovine will give up his seat as CEO of Interscope Records and join Dr. Dre as full-time Apple employees.
You've got one group of people praising the deal as the perfect union between two iconic (and well marketed) brands. There are others who lament that those two companies with over-priced and over-hyped products coming together will do nothing but produce more over-priced and over-hyped products.
However you feel about the pending acquisition of Beats by Dre by Apple, it's no doubt that we will start to see a major impact of the two tech giants as soon as the deal is official. Speculations are swirling about what Apple actually plans to do with Beats. Here are four possible outcomes of that will 'Keep Their Heads Ringing" (Don't judge me).
1. Beats By Apple: When Apple has acquired companies in the past every fiber of the company has been absorbed by Apple. It keeps the talent and tech, and nixes the brand. This is probably one of the factors that have attributed to the success of the Apple brand…no fragmentation (All Apple everything). Don’t get me wrong, Beats is a well-marketed brand not to be messed with, and has attracted “the cool” in other athletes and entertainers, in addition to all the youngins’, with all their hippity hop, rocking the brand that is starting to allude Apple. As a result, Apple may not completely strip the branding off Beats, but for $3 Billion, don’t be surprised if Apple does some sort of nomenclature reconfiguration and infuse its own identify – Beats by Apple? Or maybe Apple Beats?...That’s all I got.
2. Beats Inside: On the flip side, it would probably make more sense for Apple if it kept the Beats brand intact and opted to incorporate the Beats audio in its own gadgets. Similar to HTC and HP that have bought/licensed the name and technology in the past, Apple could continue to build on the Beats brand as well as use it to bolster sales of Apple-branded products.
3. Apple Luxe: The company known for making high-end consumer electronics could take it even a step further and create a whole new line of limited “Beats edition” versions of the iPhone, iPad and MacBook.The premium, luxury line would complement the current products, but for an even premium-er price, include the familiar logo and colors of the Beats products, in addition to packing in Beats Audio behind the speakers. Imagine a red iPhone 6S to match your red Beats headphone speaker wire.
4. iBeats Radio: Purchasing digital music has been on the decline for quite some time. Services like Pandora, Spotify, and (you guessed it) Beats Music are becoming more and more trendy with music lovers who prefer to trade a monthly subscription fee for millions of songs at their disposal, as long as their devices are connected to the Internet…which is always. Apple has tried and tried at offering its users an option other than their cumbersome iTunes library. With Apple at the helm of Beats Music, it could incorporate the streaming service that Dre built into iTunes and roll out a more robust iTunes Radio. “Music is such an important part of Apple’s DNA and always will be,” said Eddy Cue, Apple’s senior vice president of Internet Software and Services. “The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years.”
Say what you want about Apple and Beats By Dre, but both companies make gobs of money off their individual names alone. It’s just smart business to merge the two companies with ridiculously high profit margins that can attract both the loyal Apple fan boys (and girls) and the young Beats crowd that will buy those colorful headphones regardless of their sound quality.
What do you think Apple will do with Beats by Dre? Sound off in the comments!