ouch!
On Thursday night, Apple announced its intentions to buy Dr. Dre's Beats Electronics for $3.2 billion, which would be Apple's biggest acquisition ever. The deal will make Dr. Dre a lot of money, though he won't become, as many have theorized, hip-hop's first billionaire.
Of course, considering the deal involved Apple (one of the biggest names in personal computing), Beats (one of the biggest names in headphones) and $3.2 billion (well, that's just a lot of money), a lot of people took notice and started to wonder why Apple would spend so much money on headphones. Well, it turns out there's probably a fairly simple explanation, and it doesn't make Apple look too good.
Apple is completely out of ideas and unable to innovate.
Well, that seems to be the most likely explanation at least, considering every other explanation doesn't really make sense. A lot of theories have already been circulating, including the ideas that Apple wants to add a high-profit margin device to its repertoire, that Apple just wants to be cool again, that Apple wanted to acqui-hire Jimmy Iovine, Beats' co-founder with many connections in the industry.
These all have some weight behind them, but for a $3.2 billion price tag, none of them are really reconcilable considering what Apple would be getting. Apple is pretty cool and just as recognizable of a brand as Beats, and Apple could probably find other ways to work with Iovine, or just find someone else like him, for a lot less money.
"We are struggling to see the rationale behind this move," Gene Munster, an analyst with the firm Piper Jaffray, wrote in a note to investors.
http://www.policymic.com/articles/89...or-3-2-billion