Its official: Apple just bought Beats for $3 Billion
- Thread starter Maninthemirror
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Apple plays by different rules.
See:
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Sure it can, relative to its competition and the quality of the product.
devildog820
Member
Cash reserves of over $140 billion and I think they just initiated a stock buyback of $90 billion. So no, for a major company.
It is overpriced when theres better quality products for much less money.
Makes sense. One lifestyle brand with a couple of decent (but mainly overpriced) products buying another lifestyle brand with nothing but overpriced (well, overvalued) products. Match made in heaven. 
My assumption is they wanted access to Beats Music more than anything else, but as long as millions of people keep buying Beats headphones, I'm sure Apple is as happy as anyone to take their money.
My assumption is they wanted access to Beats Music more than anything else, but as long as millions of people keep buying Beats headphones, I'm sure Apple is as happy as anyone to take their money.
Angelus Errare
Banned
Soooo like alot of Apple products?
No. If it were overpriced it wouldn't be successful. If the market will bear it it by definition is not priced too high.
thefunkyman
Banned
You can buy a better sounding pair of headphones for half the price. It's not like Apple laptops Vs. Windows laptops comparisons where people on the Windows side often don't take into account the build quality, trackpad, backlit keyboard etc. There is no good reason to buy a pair of Beats headphones at all.
Tim the Wiz
Banned
Your first mistake.
Jobs actually got quite friendly with Iovine and Dre when iTunes was being run out.
But I guess Steve Jobs in death is whoever people want him to be.
.
bobawesome
Member
So brave.
Besides looking cool.
Maidenpool?
Member
$14 to make, $450 to buy
Millions of people can clearly find a reason. You might not value the aesthetics or the brand recognition, but others do and are obviously willing to pay for it.
Mammoth Jones
Member
It depends on how you value anything.
Amazon is valued at close to or over 150 billion I can't remember the exact value but it continues to lose money. But it grows at a high rate and people bet on Bezos and therefore it's valuation is insane. It invests everything into growth pretty much and world domination lol.
Would you buy amazon shares with that valuation? Knowing that you are paying for hope and the future but has no earnings.
Beats has 1.1 to 1.3 billion in revenue and is profitable. And is valued at 3 billion. You get earnings for your
Which is a better buy for your dollar? It all depends on how you see both companies and what you put value on.
Do you value growth or earnings. IMO beats valuation compared to others is reasonable.
And for apple it's dirt cheap and it's already accretive to apples bottom line.
The weirdest thing about this acquisition is that Beats doesn't feel like a premium brand, especially not when compared to Apple.
Maybe it's because I used to work at a Best Buy and I noticed this stuff, but Beats brand logo was thrown onto every cheap HP laptop and typically had on par or worse audio than every other laptop without it.
I mean there was no difference in audio at all, just a logo. Apple's logo is iconic of well-made electronics. Why did they do this again?
Maybe it's because I used to work at a Best Buy and I noticed this stuff, but Beats brand logo was thrown onto every cheap HP laptop and typically had on par or worse audio than every other laptop without it.
I mean there was no difference in audio at all, just a logo. Apple's logo is iconic of well-made electronics. Why did they do this again?
I don't see where the $3 billion valuation comes from.
According to this link Beats sold 20 million units with an average profit of $450.
http://www.google.com/url?sa=t&rct=...akATJyM7xwUgJEvzoTQ-J8A&bvm=bv.67720277,d.aWw
Technically, it's a deal if Beats continues selling $450 headphones in a weird way if Apple operates Beats separately.
I do not understand where this valuation comes from.
According to this link Beats sold 20 million units with an average profit of $450.
http://www.google.com/url?sa=t&rct=...akATJyM7xwUgJEvzoTQ-J8A&bvm=bv.67720277,d.aWw
Technically, it's a deal if Beats continues selling $450 headphones in a weird way if Apple operates Beats separately.
I do not understand where this valuation comes from.
I'm not sure why they purchased Beats but I find it funny that some people are actually hurt by this.
I just find it very weird that Apple actually bought a company that makes hardware and has an established brand.
See You Next Wednesday
Banned
Now that Dr. Dre is a Billionaire, he can finally focus on releasing Detox right?
Right?
Right?
thefunkyman
Banned
Being gullible isn't really a good reason though, is it?
Apple is known for making quality products at the high end of the market. They could have made their own line of headphones that were actually good and sold absolutely tons of pairs. It's not like they're buying great tech - anything but - so all they've bought is brand name power when they already have masses of it.
Everyone is ripping this, but I am going to say good move. I will be laughing when Apple propels Beats even higher and utilizes the streaming service/Iovine and Dre to improve the company.
No doubt, Beats is going to get a bump just from being now tied to Apple. A ton more people are going to try the streaming service now too, just cause they are attached.
No doubt, Beats is going to get a bump just from being now tied to Apple. A ton more people are going to try the streaming service now too, just cause they are attached.
BocoDragon
or, How I Learned to Stop Worrying and Realize This Assgrab is Delicious
3/4ths of what it cost to buy LucasFilm...
He doesn't look too bad next to the HGH monster that is Dre.
Kano on the Phone
Member
Yeah, who even remembers who made The Walkman?
Mine has a period.
DoktorEvil
Banned
It's 2.6 bil Cash, 400 mil equity.
If I was an investor in Beats, I'd push for more equity.
The equity is gonna be nuts down the road if they bought in at the insider price.
Very true. A proven revenue stream instead of a multiplier.
You forget about the money that went into marketing and hyping these suckers up to the general public. I wouldn't be surprised a good chunk of the pricing is going to ad agencies.
Do you know how to value companies? Beats is 4 years old I think. So 900 million profit over 4 years. I'd say most is made in the last 2 years with growth. So let's say beats made 300 profit last year. You multiply by 10 and get 3 billion equal cheap ass valuation for beats.
The 10 is the multiplier to get 3 billion. The average company on the stock market is traded at 17 times meaning beats is valued cheap if the numbers above are correct. Or maybe 450 a headset x 20 million equals 90 million than I can't do math at the moment.
Why are people who buy something you don't want "gullible"? If someone likes the way the headphones look, does that make them stupid? Why? Who are you to judge what a person chooses to base their purchase of a wearable piece of tech on?
Just chill, 'til the next episode.
SneakyStephan
Banned
Dingdingding
After the 'my fans on my laptop broke and the nice apple genius gave me some 85 dollars (they were ONLY 85 dollars normally they'd be 100!) fans for free' thread I can't wait for the 'apple sold me new beats earplugs for my phone after the old ones broke for ONLY 50 dollars' thread
The deal came through after all. Talk about a success story.
I mean, lots of people including myself figured that they made a good bit of profit based on the headset quality...
...but damn. $14 to make, sold for $450?
If I had ever bought a pair, I'd be so mad right now, even if they were years old.
I mean, lots of people including myself figured that they made a good bit of profit based on the headset quality...
...but damn. $14 to make, sold for $450?
If I had ever bought a pair, I'd be so mad right now, even if they were years old.
It's already accretive next year. As an Apple investor I'm happy about this purchase.
badcrumble
Member
Man, GAF is salty about this (and about the notion that consumers care about fashion and design in general).
If this is, as I and many others suspect, all about talent acquisition toward music-industry negotiations, I'm really really curious to see when Apple does something similar for TV/film. I don't think Netflix, Hulu, or HBO are remotely on the table, but I *do* expect to see Apple hire some industry insiders soon enough (very possibly through its already-close ties with Disney).
If this is, as I and many others suspect, all about talent acquisition toward music-industry negotiations, I'm really really curious to see when Apple does something similar for TV/film. I don't think Netflix, Hulu, or HBO are remotely on the table, but I *do* expect to see Apple hire some industry insiders soon enough (very possibly through its already-close ties with Disney).
Anyone that only takes a BOM into account when judging what a product costs to make is doing it wrong.
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