What Beats $3.2 billion Acquisition means to Apple

Apple is almost about to close a deal with Beats Electronics for $3.2 Billion, as indicated by credible sources such as the Financial Time and New York Time. Beats Electronics was established in 2008 by the former Rapper and producer Dr. Dre and the Chairman of Interscope Geffen A&M Records producer Jimmy Lovine.
Apple has not been fond of acquiring companies but within the last 15 months, it has acquired over 20 small companies. The Beats deal is believed to be the biggest acquisition ever in the Apple, Inc. history.
There are a few reasons as to why Apple is willing to take its chances with Beats and why the deal could turn out to be a bargain for Apple. The deal is not so much about the headphones as it is for Beats other audio products and services. Although with the well-established Apple products distribution stores all over the world; The Beats headphone sales are likely to go up but still not worth the deal. If anything Apple could get into the headphone manufacturing and by just slapping the Apple Logo on the headphones they would still make a killing.
Here is the bigger picture, the Late Steve Jobs was a great visionary and that is why he focused on Music distribution because of its never ending business potential. For that reason Apple created iTunes. In June 2013 they launched iTunes Radio which went head to head with Pandora but still its numbers are still staggering.
With Apple acquiring Beats they would be going against Spotify and Pandora for a seat at the Streaming Media big Table. The Beats music App has 200,000 subscribers, together with anybody with an iTunes Account, they numbers could go way above Spotify’s 10 million subscribers. If you think about it, with iTunes, Apple has a better insight on user’s music choice. If they incorporated the Apple ID login to the Beats App, it would make it even better.
Tim Cook Apple CEO has turned out to be a smarter visionary as well. With the deal, labels such as EMI Group Limited, Sony and Universal Studios have something to worry about. With the acquisition Apple gets its hand on the recording label pie.
Another bigger picture, computer manufacturer HP recently added Dr. Dre’s beats speakers to their laptops and these became an appealing move for consumers yearning for that Beats audio experience. These mean that, the rival company would either bail out or stick to using the product and make Apple more money.
What does the deal mean when it comes to Apple’s recent eye on the Automobile industry? Apple was speculated that it would acquire the Electric Auto manufacturer Tesla Motor, but nothing so far. Remember Apple recently launched Carplay a smart app that allows iPhone user to use their phones safely while driving. On the contrary, Beats had partnered with Fiat, Chrysler and Dodge to add the Beat sound experience in their automobile. Let’s say Apple’s in-dash car App plus beats sound systems in our cars. If the deal goes well, Apple will have great influence in our lives beyond computers and smart phones.
With more pros, this deal could turn out to be more profitable to Apple than most critics would speculate. Music has been a culture that has never gone away and is still a very profitable industry.