When Steve Jobs was still with us (in the later years, mind you), Apple was known for building some of the best products in the world– the iPod, iPhone, iPad, and, of course, the Mac. Concocting their own innovations, instead of working off the ideas of others, is arguably the biggest reason for Apple’s successes over the past decade-plus.
Steve, unfortunately, is no longer gracing the tech world with his presence. Apple, while one of the biggest companies in the world, hasn’t launched a new product category in four years– and has fallen behind Samsung in the ever-important “cool ranking” among today’s highly-connected youth. Our society in general is downloading much less music than they were in recent years, opting instead for streaming services such as Spotify & Rdio.
In many ways, even with $150 billion in the bank, Apple is going to need help to continue its recent success. Which, in many ways, makes their rumored, pending acquisition of Beats Music a logical next step for the company.
Sure, in various trains of thought, the world’s largest tech company, and the one that brought us music in our pockets, buying a widely-popular (though audiophile-panned) headphones manufacturer that also just happened to launch a brand-new streaming service (though the reviews have also been mixed) makes a whole lot of sense. While Beats by Dre headphones certainly aren’t the highest of high-end, they are immensely popular with today’s youth, an area that, again, Apple is having a tough time staying relevant with. Not to mention, the company has struggled with streaming radio, and although the current incarnation of Beats Music leaves something to be desired, combined with Apple’s extensive Rolodex of record labels and top-notch developers, I’m sure they can turn that ship around fairly quickly.
So, casual fans of Apple probably think this is a fairly obvious transaction– Apple has too much cash on hand, and owning Beats would not only help them to re-engage with the younger tech crowd, but will bring Jimmy Iovine (head of Interscope) and Dr. Dre in-house. Not to mention, 62% of the headphone market. A market Apple itself helped to create.
Great. So why the mystery?
Even as recent as last year’s WWDC, Apple was touting its supposed “focus” on core products– saying, essentially, that spreading itself too thin would be a mistake, as companies going this route have often ended up creating sub-par product lines (see Google). While many industry insiders have scoffed at Apple’s claim of “focus”, it is quite unusual for the company to invest in a well-defined product such as Beats, instead of just creating a version themselves.
But, maybe we’re seeing “the new Apple”? A company that would rather just buy the wheel, rather than re-invent it??
I doubt it. I’m fairly certain that, despite Apple buying Beats, the company will remain core focused on its own creative innovations– think of this more as a “one-off”, instead of the “new norm”.
But who knows? Either way, I think Steve Jobs did a couple of spins in the old grave this week…