Report: Turnover of Apple subsidiary Beats at one billion US dollars per year
The takeover of Beats Music and Beats Electronics was Apple's largest company acquisition to date. According to the US media, it was well worth it.
The latest Beats product: the Solo Buds without battery case.
(Image: Beats / Apple)
According to a media report, Apple is still very pleased with the acquisition of audio manufacturer Beats, which also included a music streaming service. Beats Music (also known as "Beats by Dre") and Beats Electronics were sold to the iPhone manufacturer in 2014 for 2.6 billion US dollars in cash and 400 million dollars in Apple shares. The subsidiary now generates "north of a billion dollars a year" for Apple, writes Bloomberg reporter Mark Gurman, who is usually well-informed on Apple matters, in his newsletter on Sunday. There are "no regrets" at Apple about the purchase.
Beats Music as the basis of Apple Music
What is often forgotten in connection with the Beats purchase is the fact that the acquired music service Beats Music ultimately laid the foundation for the success of Spotify competitor Apple Music, which was launched in 2015. It is part of Apple's steadily growing service business. When Beats was acquired, there was still criticism that neither the team there nor the products justified the high price of 3 billion dollars – at the time and to this day, the largest acquisition Apple had ever made. From a business perspective, however, the deal turned out to be a "huge success", according to Gurmann.
Apple actually uses Beats technology to round off its audio business at the bottom end. If you don't want to buy the expensive AirPods products, you can opt for cheaper Beats hardware. This is not without controversy, as it is often made of a lot of plastic and has a reputation for being rather bass-heavy. Apple recently launched the Beats Solo Buds, inexpensive Bluetooth earbuds without a battery in the charging box and without ANC noise suppression- the reviews are rather mixed. Nevertheless, the Apple subsidiary always manages to find prominent marketing partners. Products that are not yet available appear on the Instagram accounts of VIPs.
Apple technology in Beats products
Buying Beats products can make sense if you want to get Apple audio technology at a comparatively low price. The company uses similar sound chips in its devices, which also enable modern functions such as audio sharing or quick device switching.
The sound has also become better and more neutral over the years. In addition, Apple first used USB-C ports with Beats - also because they always work well with Android devices – even before they ended up in the AirPods (where the transition from Lightning has still not been made). Apple is thus successfully pursuing a multi-brand strategy with Beats.
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(bsc)