apple inc.’s (nasdaq:aapl) potential $3.2 billion acquisition of supercool headphone maker beats electronics shows that ceo tim cook is beginning to wheel and deal in a fashion that steve jobs, his legendary predecessor, would have found repugnant.the cupertino, calif.-based company’s interest in buying beats electronics, which also is home to an online music service, was first reported last week.the market on friday hated the news, with apple losing more than $2 billion in market capitalization. malik also said the beats’ headphones were lousy and its streaming service was junk.“i am down on this deal,” malik wrote later in a blog. that hasn’t changed.”the collective wisdom among the nerds is that apple doesn’t make big splashy buys.
beats electronics, with about $1.3 billion in annual sales, is a tantalizing target. trendsetting hipsters love the beats electronics headphones, and its streaming music app could perhaps fit nicely into the itunes franchise, which has seen its market share of music sales sag to about 50% from 70%. beats’ value has tripled in about eight months because it dominates the market with about two-thirds of the sales for high-end headphones at $100 or more.
the potential price for beats is a fraction of the $19 billion in cash and stock that menlo park, calif.-based facebook inc. (nasdaq;fb) said in february it was paying whatsapp, a messaging service that works across different smartphones. that’s why a purchase of beats makes sense.huge war chestand even after such a deal, apple would have about $16 billion in cash for more deal making and another $190 billion that remains parked offshore, free and clear of u.s. taxes. what the nerds miss is that this kind of deal is not intended to transform apple.
with preorders for the new iphone 6s and 6s plus starting last weekend, it looks like apple has already sold out of its initial launch inventory. even so, the departure of scott forstall from apple leadership is, like the release of itunes 11, a sign that apple is in the throes of some major apple is said to be in discussion with some prominent podcasters to better provided by apple, which could be a good sign for competitors. update: qualcomm has unsurprisingly claimed that the ruling ‘has no impact on agreements with any other licensee.’ apple’s (nasdaq:aapl) pending purchase of beats electronics has overcome its first regulatory hurdle after being approved by the european
and buying beats electronics puts apple’s engineers on notice that the boss is not afraid to go outside the company to pursue consumer electronic excellence.