(May 2014) The thinking behind why Apple is making a move for Beats?
“It’s a wearable tech play” – DigiBod.com


Thoughts to consider as Apple moves to purchase Beats.

Questions about the business rationale for the biggest acquisition in Apple’s history dominate most all news reporting today following the announcement of an Apple/Beats Music deal

Beyond the first wave of news and at the core of Apple’s business move is a story that’s more than meets the ear. In the broader picture, Beats is, in our opinion, a wearable technology play, one of many Apple is making with Jobsian vision to create the future of wearable technology as they uniquely did with their first-gen consumer-oriented devices and services – iPhone, iPod, iPad, iTunes, iStore, iCloud…

Think iCloud content streaming to all your devices. The upcoming iWatch and now iHeadsets (iBeats) continue the move as a broad-front strategy…

*Think Cloud, think Age-of-Context Streaming is on the rise. (Downloads and download per-unit pricing is going the way of CDs, a distribution model that is becoming old-school.)

*Think design of hardware and fashion-sense When Beats redesigned its headphones last year, it hired a design firm run by former Apple design chief Richard Brunner. Think Apple updating of audio as a listening center, an audio ‘hub’ for music and more…

*Think marketing and merchandising One day soon, Apple could give away low-end Beats headphones for free with its iPhones and iPods, a connected gateway to content, services and Siri

*Think algorithms, and curated digital services, think entree via audio to a user’s individual desires and needs Beats claims to be “the first music service that understands you” because it uses an algorithm that plays music to suit your mood – and with an Apple touch the curating can be improved and expanded to suggest and assist activities to benefit your health and more…

*Think of a young, growing audience with increasing purchasing power Beats has brand cachet, particularly with teens and young adults. Its fashionable headphones could also “dovetail with Apple’s attempts to get into the wearable device business”, notes Cowen & Co. analyst Timothy Arcuri.

*Think of the upcoming iWatch and iHealthbook, the mHealth/eHealth market that is creating #NextGenMed, fitness monitoring, digital connectivity across devices – What you want, When you want it, Where you want it… Apple is expanding the world of Jobs…

*In addition to Apple’s strategic plays mid- and long-term into new wearable tech markets, health and fitness, think short-term numbers Beats’ headphone business generates more than $1 billion a year in sales. If you argue a 3x multiple for that business makes sense, then the Beats deal makes sense

In sum, Digibod.com looks at the vision of Steven Jobs’ successor, Tim Cook, and we thinks there is an Apple legacy at work here. Beats is a play to extend and expand Apple’s presence and power in the connected, wearable tech space.

It’s a wearable tech play.

May 9, 2014


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Published on: May 9, 2014