It’s technically still speculation, but it’s starting to look an awful lot like it’s true – reports are flying around that Apple is set to buy Beats for $3.2 billion. If I could describe it in a word – different.
The odd thing about the potential purchase is that both brands seem to be stuck in the same boat – they soared to great heights by using exceptional marketing, and now the rest of the market is starting to have their doubts that they can keep up that sort of growth long-term. That’s not to say Apple devices are bad (clearly not) or that Beats headphones are junk (depends on who you ask), but it is saying that, at their respective peaks, both brands reached the pinnacle of pop culture stardom. Apple certainly is no longer at that peak, and you could make the case that Beats are starting to teeter off the edge, although they do currently hold 30 percent of the headphone market and a staggering 60 percent of the premium headphone market. Still, a large part of their current success is that they’ve become part of pop culture, and pop culture is notoriously – necessarily – transient. It’s not immediately clear how the two coming together will be able to regenerate that cool factor.
But, the weirdest part is how unlike Apple this is. Apple is no stranger to buyouts, although maybe they don’t go on quite the spending sprees that their top-flight tech brethren do. However, when Apple does buy someone out, it tends to be a small outfit that they can easily assimilate into the Apple brand. Everything owned by Apple is distinctively Apple, and when someone new gets brought into the fold, their software is molded to fit Apple’s grand designs. The kind of Facebook-Instagram, Microsoft-Nokia mega-deals don’t fit with what Apple does, because Apple has always had a strongly unified design philosophy across all of its products. Purchasing Beats seems to be a striking break from that tendency.
Conventional wisdom seems to be suggesting that this move was made not for headphones, but for Beats Music, Beats’ new music streaming service. Apple is still running the iTunes app store, which has all of a sudden become very outdated, and is seeing a decline in downloads. General trends are moving away from buying single or album mp3s, and fully toward streaming music like Spotify, Rdio, and, yes, Beats Music.
That’s caused many to wonder if a Spotify buyout is in the offing (I don’t really need to name the prospective buyers, do I? You can count them on one hand.). That’s idle speculation for now, including this purchase, which has still not been officially confirmed. But, if Apple is really buying Beats, Google could certainly make a move. Google Play Music as a streaming service hasn’t really taken off – it’d probably be a lot easier to just buy Spotify. You know they have the money.
So, there’s talk of a streaming music arms race among the tech giants, and isn’t this getting just the least bit (OK, a lot) unsettling? These few big tech corporations – Google, Apple, Microsoft, Amazon, Facebook – are becoming enormous behemoths. And, everything is worth it, because everything carries with it the allure of sweet, sweet data. It’s the nectar that pollinates the Internet economy – as long as you do stuff online, one of the giants will want to eat it up. It’s just a matter of who floats enough billions first.
Via Financial Times