Apple agrees to buy Beats for $3 billion; adds music veterans Iovine, Dr. Dre to staff $AAPL
The rumor is now official. However, there’s still a lot of puzzling pieces here:
- Is Apple moving away from it’s “One P&L to rule them all” strategy if it operates Beats as a completely separate brand? Apple is known for having no divisions and only one balance sheet. This is VERY different from nearly every other company.
- Will they give preference to Beats in their online and retail stores? If so, will that effect any other existing partnerships?
- Will there be any vertical integration? In other words, are the free earbuds that come with an iPhone going to get better? be Beats branded? Will there be any special hardware/software that Beats headphones will have preferential first access to?
- Is there a larger play that we don’t know about yet to move into more spaces? Would Beats be a part of that, or perhaps the brand under which it was accomplished?
At any rate, it’s becoming more clear that while Tim Cook and company are pretty clear on what makes Apple great, they are not paralyzed by a past-focused “what would Steve do?” mentality. They are honestly trying to be Apple in today’s world, instead of becoming a post-Steve cargo cult. This is a good thing for Apple – even if every decision isn’t perfect (it will take a long time to see if Beats was in the good or bad decision camp).