‘Apple must’ be crazy to buy Beats
It’s funny to see the contrasting approaches to how people report Apple in comparison with Google. News that Apple is set to spend $3.2 billion on Beats attracts ridicule, while reports of Google’s $12 billion acquisition of Motorola Mobility were insanely starry-eyed.
The reasons for purchasing Motorola seemed to consist of Google’s attempt to further its nuclear war against Apple. (And ignore critics of that war forever, please, as with what so many see as its imitation, it was Google, not Apple, that fired the first projectile in that war).
Despite this comparison, many pundits seem unable to think in a positive way about Apple’s acquisition. It as if they forget that Apple (unlike Google) never spends money without a good reason. Take a look at these example headlines that reflect the confusion pundits feel:
- Why Apple Has Lost The Plot With $3.2 Billion Purchase Of Beats By Dre
- Apple’s rumored Beats buyout baffles pundits & analysts alike
- Will Apple buy Beats for $3.2 billion? Munster is skeptical
- Is Beats a mistake for Apple? No diggity!
All of these people are wrong. Apple clearly sees value in Beats, and the chief slice of value I see in the deal is the industry knowledge and vision of Jimmy Iovine. That intellectual investment may prove invaluable as Apple seeks to resurrect its iTunes brand, and take itself to the forefront not of how people purchase music today, but how they will acquire it tomorrow.
This is a company set to cast some fresh dice into the game.
Part of its gamble here is to invest in nurturing fresh young talent — and an investment in Iovine and Beats makes sense in those terms. After all, in May last year Iovine and Dr. Dre donated $70 million to the University of Southern California to create the USC Jimmy Iovine and Andre Young Academy for Arts, Technology and the Business of Innovation. The goal of the Academy being:
“To shape the future by nurturing the talents, passions, leadership and risk-taking of uniquely qualified students who are motivated to explore and create new art forms, technologies, and business models.”
Pundits don’t have a clue. They can’t see beyond their nose. Ignore them and consider the strength and significance of Apple’s growing brains trust. This is a future-focused investment aimed at creating a media acquisition platform to underpin Apple’s other products for the next decade.
The following video may be informative (as might be news that Beats designer Robert Brunner hired Jony Ive to Apple in the first place).