Now that Apple has officially announced that it’s acquiring Beats Electronics and Beats Music for $3 billion, the media speculation engine can finally begin to wind down. While that happens, let’s take a quick look at the prospective winners and losers in the deal.
Apple: In Beats Music it gains the infrastructure it needs to move away from music downloads into streaming, in Beats Electronics it gains an entry into a market segment where it had no presence (high-end audio accessories), and by adding Beats co-founder Jimmy Iovine to the executive team it adds some sorely needed vision (see my previous post).
Beats Music: It gets saved from swimming against the current of more established music services like Spotify and Pandora, which have a considerable head start. Although the company had some relatively deep pocketed investors in billionaire Len Blavatnik’s Access Industries and the Carlyle Group, that’s still not enough to compete with Apple, Amazon and Google in the long run when they enter the market.
Beats Electronics: Gets purchased at its peak or just beyond, so it’s saved from having to worry about market attrition. Plus it now gets to take advantage of the engineering and manufacturing expertise of Apple.
Tim Cook: Makes an attempt to fill a hole left in the company after the passing of Steve Jobs, which makes him look somewhat visionary himself.
Jimmy Iovine: Makes the leap from the music business to big-time tech while cashing out from Beats. Now he’ll get to have a say in the direction of the tech giant, which may be the ultimate in industrial glamour these days.
Dr. Dre: Raises his status in the urban community by cashing out to become the first near-billionaire hip hop artist/producer, and is able to escape the music business if he wants. Read more on Forbes.
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