Why Apple’s Beats Acquisition Keeps Improving With Age

Apple bet big on the future of headphones

On May 28, 2014, Apple officially announced that it had made the biggest, most expensive acquisition in the company’s history. But the company Apple bought was not a competitor, nor was it a traditional tech hardware or software company whose flagship products could be integrated into Apple’s lineup of iPhones, Mac computers, or iPads. Instead, Apple chose to spend $3 billion on Beats Electronics, the company started by music industry mogul Jimmy Iovine and legendary rapper/producer Dr. Dre that was famous for its popular, stylish, high-priced Beats by Dre headphones.

It was a move that left countless Wall Street analysts and tech commentators scratching their heads while repeating the already common refrain that Apple was lost and doomed without founder Steve Jobs, who had died just three years earlier in 2011. Why on earth would Apple spend so much money on a company whose audio products were widely derided by audiophiles and reviewers for lacking good sound quality while also being vastly overpriced? Was Apple signaling a change in philosophy away from selling best-in-class, iconic hardware in favor of fashionable, high-margin junk? Or was Apple simply confirming what critics had been saying for years, that Apple has always been about style over substance, utilizing clever…