Since the death of Steve Jobs in 2011, Apple has had a lack of spectacular product releases. With bland updates to the iPhone and iPad models making up the majority of the company’s output, they are in need of another game-changer in order to recreate the creative, forward-thinking aesthetic that made it so popular to begin with. In line with these thoughts, Apple is reportedly working towards a merger with Dr Dre’s Beats brand of headphones to negotiate what could become a $3.2 billion deal. If this deal goes through, iPhones and iPads may be getting a boost in terms of sound, courtesy of The Doctor himself.
This deal would be a huge one for Apple. Not only is the $3.2 billion price tag well over the official valuation of the Beats brand (at $1 billion), but it would be also significantly more than the company has ever paid to buy a company. Even the $1 billion valuation of Dr Dre’s company is higher than any amount Apple has paid to purchase a company in the past. With such a huge price for this deal, there are several speculations about what is to be gained from it.
One of the potential benefits of a deal between Apple and Beats is the audio quality upon which Beats prides itself. Beats has demonstrated through its presence in the high quality headphone market that it has the technology to back up its market appeal. With the wealth of audio apps available in the iTunes store, for both music playback and music production, audio quality is a big deal for this niche fanbase. If Apple continues its work towards a merger with Dr Dre’s Beats company, the pairing of the two would draw even more music-minded consumers towards the currently stagnating company.
Another factor that could be influencing this potential deal is access to the Beats streaming music service. With the release of iTunes Radio for iOS7, Apple has dipped its feet in the water of trying to capture this market, but has yet to gain the household name status of other music streaming sources. By combining with the Beats subscription music service, Apple could be seeking to catch up to current trends in music purchasing and sharing, and bring itself back into the relevance that it has lacked in recent years with iTunes. Beats has been able to develop products and marketing in a way that reaches out to and connects with consumers, as shown by the popularity of its headphones, Beats Pill speakers, and music service. These marketing resources would prove invaluable to Apple in regaining its status as a technological innovator.
Reports have stated that a decision between the two companies could be released as early as next week. With rumors of an August release for the larger-screened iPhone 6 released, the device is set to reach out towards a broader audience than its smaller early models. If Apple and Beats are able to work towards and finalize the rumored merger, the coolness factor that has been lacking in recent iPhone and iPad releases will get a boost from the development and marketing team at Beats Audio.
By Joseph Chisarick