Reasons why Apple bought Beats



Last Friday, Financial Times reported that Apple is close to buying the company Beats Electronics, manufacturer of the popular headphones. In addition , the company owns a music internet service Beats. According to the agency , the amount of the transaction is $3.2 billion

Some experts have expressed doubts as to the possibility of a future transaction , and its necessity . So , Gene Munster , a senior analyst at Piper Jaffray made ​​a comment that at first glance the deal specifically did not make sense : why buy  Beats brand, already having a wonderful Apple brand? With a massive engineering resources in which Apple will have no difficulty to develop excellent headphones independently.

However, other analysts polled by Bloomberg, said the deal Apple and founded Beats Electronics .

“This congenial company – says Peter chati of Digital Media Ventures. – Steve Jobs wanted to develop a close relationship with the music industry . Guide to Apple Beats and very well known to each other. “

At Apple Beats and similar views on road projects , he said. Apple this year began offering its automotive platform CarPlay some models Ferrari, Honda, Hyundai, Mercedes-Benz and Volvo. CarPlay allows drivers to connect their iPhone and use the built- in screen for viewing car Apple Maps, phone calls , send and receive messages using voice control Siri and listening to music . Beats Music – of supported applications . Beats Audio, which includes speakers and amplifier, available on some models of Chrysler, Dodge and Fiat.

“Beats – known manufacturer of high quality headphones , and Apple to work on improving the quality and design of future models ,” – says Adam Satarin from Bloomberg. Beats controls 70% of the premium headphones , Apple – about 60% of the digital music market . ” We believe that the efficient use of cache and acquisitions in the sector of Internet services , given that it is , in our opinion , the weakest Apple”, – the analyst added .

In buying Beats valuable employees . More specifically , it is a great find for Apple could Jimmy Yovin help the company in terms of content.

“Talent – expensive stuff. This deal – it is very expensive hiring people through takeover . Apple needs effective model of working with content distribution strategy , “- said chati .

In another research company – Cowen & Co – believe that buying Beats will be a “significant departure ” from past M & A- strategies Apple. At the same time , although Beats ” does not seem particularly attractive to Apple”, positive ” acquittal ” factor may serve as a sale in the amount of $1 billion , analysts .

Analyst Brian Blair believes that the deal will “allow services Apple will expand to other platforms .

” iTunes will continue to decline, if Apple will not be able to find a solution on all platforms , not only on the iPhone”, – he said.

Among other possible causes are called as follows: fight with rival Samsung, offered $3.1 billion investment in wearable electronics , as well as eliminate competition by using Beats Music streaming in conjunction with iTunes Radio.

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