What the Beats Acquisition Says About Apple

By now you’ve surely heard the news, at least if you care even a little bit about the tech industry: Just a couple weeks ago Apple’s Tim Cook said that the company was “on the prowl” for acquisitions, and just a few days later it was announced that the company was in talks to purchase Beats Electronics, for a bid of some $3.2 billion.

The announcement raised some eyebrows, to say the least.

For one thing: Apple used to set the standard for cool products, and if you doubt it then just think back to all the buzz over the initial iterations of the iPod. (Do you remember how much street cred the company won—and how much buzz it built—with its U2-featuring iPod commercials from circa 2004?) Now, Apple has acquired the outlandishly big, colorful headphones of Beats—a popular product, perhaps, but not its own brand of cool. (There are also some concerns and criticisms about the quality of the Beats headphones, but more on that later.)

In taking over Beats, Apple will also obtain the relatively new Beats streaming music service; the question here is, why doesn’t Apple simply build its own streaming service?

What the Beats Acquisition is All About

In my view, this decision is all about a few basic factors:

  • The finance guys at Apple clearly see this as a repatriation of profits.
  • Apple will have a straighter path to the bigwigs in the music industry.
  • Brands still rule, and the Beats brand has a surplus of cool that Apple apparently needs.

More than anything else, though, I think this is about the very different place that Apple is in now compared to when Steve Jobs was running the show. That’s the big takeaway from all of this, for me: Cook-era Apple is a totally different creature than Jobs-era Apple, and it’s never been clearer what the missing ingredient is: Sales.

Two Approaches to Apple

What do I mean by that? I mean simply this: Tim Cook is not a salesman. He is an operations genius. He runs Apple, but he doesn’t sell it.

Steve Jobs was a master salesman, and he could guide a conversation with anyone. Tim Cook, meanwhile, has collected a lot of sales data and drawn inferences from it, whereas Jobs always focused on simply providing value to customers, taking them somewhere new.

Under Jobs, Apple actually sold you on its value and its uniqueness. The new Apple tries to buy its way into minds—i.e., with a music streaming service and a headphones lineup that come with the strong brand recognition of Beats.

None of this is meant as an indictment of Tim Cook, who is gifted in a number of ways and has done much good for Apple—in particular Apple’s just-in-time delivery. But while Cook is many things, cool is not one of them. The leading edge of Apple has always been cool, and now it seems like the company is groping for it with equal parts calculation and desperation.

In Defense of Beats

A final note that I might make, as sort of a footnote to my main point: This announcement has been met with a lot of criticism over the sound quality in those Beats headphones, but on a purely anecdotal level I think this is unfair. At the gym I frequent—which is mostly populated by 20- and 30-somethings—Beats headphones are the standard and they are usually plugged into iOS devices (now that’s Rhythm-Selling!), likely because the heavy bass fidelity makes the Beats headphones so appealing for power-lifters and those doing aerobic workouts. You may not like the product personally, but there’s clearly a market for it—and one hopes that Apple has appraised the value of that market rightly.