Analysts Give Apple-Beats Deal Mixed Reviews

What had been rumored for weeks came to fruition yesterday when Apple confirmed it intends to buy Beats Electronics for $3 billion, its largest acquisition yet.

Wall Street analysts first struggled to comprehend the deal initially, noting that Apple makes its own brand of premium headphones and has a curated subscription music service.

Apple iTunes President Eddy Cue and Beats co-founder Jimmy Iovine said it’s about the music. “Apple has been involved in music since Day 1 ... This is about us continuing to invest in music,” CNET reports Cue said to explain the deal.

The tech developer also sees an opportunity in speakers, according to the account.

CNN, meanwhile, pulled together viewpoints from several financial analysts. “We would note that the recently launched Beats Music streaming service is reported to have a mere ~250,000 subscribers and only has two awarded patents. Beats Electronics has 20 awarded patents,” it quoted Baird’s William Powers as saying. Kulbinder Garcha of Credit Suisse notes that Apple’s iTunes Radio “may not be yielding the right results” and the Beats deal may help propel that while Apple’s brand can accelerate Beats’ growth.


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What does it mean? It means that Apple has a lot of cash to burn and they're willing to pay too much for something. Remember KOSS headphones? What if Microsoft would have bought them 25 years ago?
By S. Wozniak on 5/29/2014

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