I’ve already blogged a bit about the recent news that Apple planned to acquire Beats Electronic and Beats Music, for a total price tag of $3 billion. Many more words will be spilled on this issue, and I don’t mean to add to the noise—especially not before the details of the acquisition really begin to shake out and we can see some real-world implications. For now, though, there is one question that remains interesting to me: Why exactly did Apple want to acquire Beats in the first place?
I’ve conjectured before that the answer probably has fairly little to do with technology per se. Some believe that acquiring Beats is Apple’s way of getting into the streaming music game—and while that may be true, it’s important to remember that Apple could very easily build its own product to compete with Beats and Spotify, if it really wanted to.
So maybe it has nothing to do with technology and everything to do with something that’s more ephemeral but no less important—and that’s coolness.
Cashing in on Coolness
As I’ve said before, coolness is something that Apple once had in spades, but its supply has dwindled a bit over the years. Tim Cook is a talented man and in many ways is unparalleled at what he does, but the one thing he isn’t is cool—and Apple’s reputation for developing and selling its own unique brand of cool just isn’t what it was during the Steve Jobs years.
Beats Music is in another bag. The company’s execs—now Apple employees!—include guys like Jimmy Iovine and Dr. Dre, both of whom have more than a passing familiarity with making and selling cool. And, as a Mac Rumorsarticle notes, the Beats brand—whatever else it might stand for—certainly stands for hipness.
The article states: “Beats is often criticized as being a bass-heavy fashion accessory and not a true audiophile product, but sales figures reveal that the typically younger consumers who buy Beats are more interested in appearance than audio quality… Beats accounts for 27 percent of the $1.8 billion headphone market and more than half (57 percent) of the premium market for headphones with a starting price tag of $100 or more.”
Will it work?
The mathematics on this one might be pretty simple, then: Apple has many things, but it doesn’t have cool. Beats has cool, and plenty of it. Apple buys Beats. Apple gets cool. Sounds easy, right? Sure—but will it work?
The same Mac Rumors article suggests that it’s already working, at least to a degree: According to the article, an education technology company called Chegg “asked 10,000 students about their experience with Beats and their knowledge of the Apple-Beats merger… More than half of the students (60 percent) were aware of the deal with one quarter claiming the deal will make Apple more ‘cool’ and fifty percent believing the acquisition will increase Apple’s popularity among students.”
That’s definitely good news for Apple. In fact, it may be exactly what the company was after. Only time will tell how well the Beats acquisition will really pan out, but for now, it seems to be giving Apple a much-needed injection of store-bought cool.