[abalone]

This makes even less sense than the Square acquisition rumor.

1. Apple has the tech and library to do their own subscription service if they want to. You think they can't do their own licensing deal? They surely don't need to pay $3B to acquire someone else's.

2. Apple wouldn't want to operate a cross-platform service. They'd pay a huge premium to acquire a bunch of Android customers than they'd promptly purge. Plus, it'd probably invite anti-trust scrutiny.

3. The argument about Beats headphone quality is moot. Even if it's more than just marketing / bass-heavy EQ, Apple would not pay $3B to acquire headphone technology.

None of that makes any sense at all. I have to believe someone thinks Beats and Square are interesting to Apple because their products have a certain superficial Apple design aesthetic. But it makes no sense from a business model standpoint.

Or maybe Apple's doing some kind of next-level mole hunt here to level-up on secrecy.

[halviti]

The mole hunt is a great thought.

It simultaneously gets rid of people that leak to the press as well as anyone working for the company that hears something like that and not only believes it, but doesn't speak out against it.

[dev360]

Crush all opposition, just like Stevie would have done!

[abalone]

Update on my comment: After reading this article over at Daily Dot there are maybe some flaws in my assumptions.[1]

1. Apple might actually need to acquire a team to do better licensing deals with the music (and TV/movie?) industry. Beats, I didn't realize, has some incredible people involved and has a lot of industry buy-in. That sets it apart from Spotify, etc. even though it has no subscribers.

2. Maybe Apple does want to buy a brand. The Beats brand has a lot of pull with communities where Apple doesn't, especially African-Americans. They may see it as an opportunity to upsell them from Android to Apple products.

3. Maybe Apple does need a cross-platform service to do the deals it needs. Like they did with iTunes on Windows back in the day. They get that, without any awkward "iTunes for Android"

4. Beats' headphones business is totally not Apple's approach.. yet? Right now it's more like Monster Cable, commodity product dressed up with sales & marketing & cachet. But what's to stop Apple from improving the quality of the brand? Apple-designed Beats headphones could be something very special. (But that is the weirdest part of this.. Monster is the antithesis of Apple and Apple's never done sub-brands. Maybe they literally bought them just for the preceding reasons.)

[1] http://www.dailydot.com/technology/apple-beats-jimmy-iovine-...

[leemcalilly]

I hope they are "doing some kind of next-level mole hunt to level-up on secrecy" here. I do not see any value in Beats other than a superficial fashion trend that has already run its course.

[lmm]

A cynic would say the same about the iphone. I think there's a good fit here - the same kind of people buy both, so there's lots of opportunity for cross-promotion.

[dagw]

But not $3 billion+ worth of opportunity. If all they wanted was cross-promotion there are plenty of ways to do that without buying the company outright. If Apple wanted to get into the fashionable accessories market they have enough brand clout to do so on their own, without having to buy an existing player.

[gress]

In a weird twist, that cynic would be superficial.

[mjburgess]

cynics are usually superficial. it's the easiest thing in the world to say "no".

[sjwright]

By that logic, Apple should buy Google.

[lmm]

They probably should, if they could afford them and weren't going to be blocked by the competition commission.

[blibble]

and if Larry and Sergey didn't have the ability to outvote all of the other shareholders combined

[jcampbell1]

> You think they can't do their own licensing deal?

When you are the richest guy in town it is hard to negotiate a good deal. It is probably much smarter to just buy Beats. If they bought Spotify, they would be stuck supporting Android and Windows customers.

The $3B price probably reflects the current profitability of the headphone line. For what it is worth, audio brands seem to have staying power. I am not sure if the quality criticisms are a positive or negative value signal personally.

[Scorponok]

Other services (like spotify) have tended to have clauses in their licenses saying something like "If you get acquired, the deal is cancelled and you have to renegotiate it" so that the record companies can prevent exactly this from happening. I would be surprised if Beats doesn't as well.

That means that it doesn't matter if Apple (or anyone else) buys someone who already has a deal - the previous terms go away and the record companies get to start the negotiations all over again.

[k-mcgrady]

Don't forget Beats is run by a record label boss. He is extremely well positioned to make those deals.

[Braveatom]

True, but if they have a system ready to roll and are in a good negotiation position (iTunes is effectively a monopoly) it puts a lot of pressure on the labels to sign

[abalone]

I don't understand your argument. Beats also supports Android and Windows, like Spotify.

[jcampbell1]

My assumption is that Spotify has so many passionate customers that killing the Windows/Android apps would earn Apple enough bad karma, they could never do it. Apple could kill Beats Music, integrate it into itunes, and the small number of customers can't kick up enough stink for Apple to care.

[kristiandupont]

>When you are the richest guy in town it is hard to negotiate a good deal.

Do you mean that the negotiation will go something like "come on, we know you can afford more!"? Granted, I haven't ever participated in negotiations at this level but I really doubt that being rich is a disadvantage.

[Jtsummers]

Especially if you have other options and aren't in a rush. "You've got a nice portfolio of licenses, we're interested in working with you." "Fine, but we know you're worth over $120 billion so pay us $1 billion." "Thanks, we'll talk to your competitors now, or maybe just get our own licenses."

[luma]

All negotiations start with what you think the other party can afford. I've never worked on a billion dollar deal, but I've worked on plenty of million dollar deals and I can assure you, perception of the other parties' ability and desire to pay does in fact play a factor.

[inthewoods]

"When you are the richest guy in town it is hard to negotiate a good deal."

When you control distribution and can offer larger revenue streams, you have a lot of negotiating power. See: Walmart.

[nemof]

but apple do effectively corner the accessories market for people buying iphones. if this acquisition happens it's about getting people to spend more money on gear after they buy their apple i-product.

[prawks]

My grandmother has an iPad.

My grandmother does not have Beats.

No amount of licensing, etc. is going to get Apple the branding that Beats have right now in the music hardware space.

[littlemerman]

Agreed that this is confusing. My hunch is that we we'll need to wait a few days to see if the rumor is real.