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Apple's looks at Beats Electronics for streaming and wearables

May 12, 2014 | Jean-Pierre Joosting | 222904960
Apple's looks at Beats Electronics for streaming and wearables The story in the press that Apple is close to acquiring the headphone and online music business Beats Electronics for USD3.2 billion has generated a lot of negative and positive buzz.
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There is also a lot of commentary about Apple paying too much for the company. However, USD3.2 billion is small change for Apple and Beats Electronics is not that small either.

Martin Scott, Head of Analysys Mason's Consumer Services research practice, has this to say: Apple are not just buying a headphone business – it’s a streaming business too. Apple’s investment makes sense. We’re talking about a strong higher-end headphone manufacturer – industry estimates tend to put their 2013 sales at USD1.5 billion. Beyond that, however, Apple are also buying a strong brand and an interesting burgeoning online streaming music business. Beats Music is well integrated with AT&T handset plans, and its ‘curatorial’ approach to music recommendation (getting musicians and celebrities to recommend tracks and playlists, not just an engine) should have good synergies with the Apple brand.

Martin Scott, also alludes to a second aspect: Apple is likely to do a lot more with headsets, and wearables, possibly around health. In February 2014, Apple was successfully awarded a patent for a health-monitoring earphone system. These earbuds would monitor temperature, heart rate, perspiration and potentially act as a controller, as well as delivering audio.

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