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Apple to buy Beats Electronics


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Apple has opted to buy Beats Electronics for a record price of 3.2 billion dollars. This is a move many experts have said should be undertaken by Apple, recently a more cash conservative company. Facebook has made more headlines within the last year with all of the technology and communication companies it has been purchasing up. So to have the innovative giant Apple, step up to push to buy Beats Electronics, it is exciting to see investors and techies alike take notice.

Why Apple want Beats Electronicsbeats electronics 1

Apple has actually been shopping around for some time looking for the right company to purchase and invest in. The role of an established electronics company that specializes in premium audio products would fit nicely with the two most popular products produced by Apple, the iPhone and the iPod. More specifically, the reasoning behind the logical decision and desire to buy Beats is because to date, Apple is the largest seller of music online. Rumors have been circulating in both the automotive industry as well as the programmable music platform industry that Ford is looking at dropping Microsoft Sync from its vehicle lines. If that rumor comes to be true, that would mean one of the largest and more stable of the American car manufactures is on the hunt now for a program that could effectively replace their existing subscription. Currently Beats Electronics speakers are being used in many of Chrysler’s automotive trims, so the thought that Ford would be looking at Apple isn’t hard to come by.

What is Apple worth? Beats Electronics?

Early first quarter reports revealed that Apple had roughly 130 billion dollars in cash. Most of that money was invested overseas, but could be quickly mobilized if needed. After the end of the first quarter, Beats electronics is estimated to be worth at only about 1 billion dollars. Analysts and experts alike are studying and questioning whether the possible purchase of Beat Electronics for 3.2 billion dollars would be a smart or sound move to make. Many are speculating why Apple would invest such an amount of money into a company that is producing technology that has already been well established in its given market. Experts agree that many multi-billion dollar corporate acquisitions that take place are done so in the effort to purchase and own technologies that are relatively new to the market, but revolutionary towards certain industries. Beat electronics is not producing an industry game changer, which leads many to wonder why Apple is so interested.

beats electronics 2Innovation for Success

Apple is a self proclaimed innovator. They cultivate and produce in house, and have done so for nearly the better part of its existence as a company. Today technological giants like Amazon and Google have been investing in music streaming programs to combat iTunes, which has been the backbone to Apple’s success in recent years. But iTunes has been faltering and sales are becoming sluggish in recent months. Apple had introduce iRadio last year to combat Pandora as well as music streaming programs now being offered by Google and Amazon. It is possible that Apple is taking a different step towards long term financial success. Historically great powers, great companies weren’t always the best innovators but were better at perfecting the technologies and services around them. One of the greatest examples in you history book can be found in the Roman Empire. While not innovators themselves, they took the technology and perfected it for their own uses. The same might be able to be said about Apple, looking to reestablish itself as number one in the market.

The deal itself

The purchase deal itself is far from being complete and could actually fall apart at this stage. But many are hopeful that the deal does in fact go through, because of the applied technologies and capital that Apple has and could offer for a better product. There aren’t many details released about the terms of the potential deal other than price and that both companies are in talks currently. Beats had been given a 500 million dollar investment by the Carlyle Group back in September 2013 which was the spark that raised Beats Electronics overall value to about 1 billion dollars. At the same time the company had also purchased slightly under a 25 percent stake in the Taiwanese smart phone manufacturer HTC.

No matter how you look at it, if Apple is able to purchase Beats Electronics investors and techies alike may see a better produced and more perfected product soon to hit the shelves. Other than overall cost of the deal to Apple, there is relatively little risk in purchasing Beats Electronics because of the deconstruction and perfection that could be done between both technology companies. Perhaps soon a better more vibrant product will be available for the public to use and enjoy.

 

 

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