Shooting Down Trial Balloons
On Thursday, May 8, 2014, a strongly supported rumor stated Apple was preparing to purchase Beats Electronics for 3.2 billion dollars. As the news flooded the technosphere, it seemed as though most every pundit felt the need to float a trial balloon in order to keep their virtual heads above the virtual flood waters. As I wasn’t able to generate enough hot air to inflate even a trial balloon of my own, I spent an enjoyable weekend sniping at others and shooting down their poorly constructed balloons instead.
What fun.
[pullquote]What if there were no hypothetical questions? ~ George Carlin[/pullquote]
I mean, after all, what’s the point of being an analyst if one can’t be anal once in a while, right?
But now it’s time to get back to the serious job of analyzing the Beats purchase…
…or is it?
CAPTION: The Beats Rumor Turned The Tech World On Its Head
Opining Is What We Do (Even When We Know We Don’t Know What We’re Doing)
Of course, the real expert opinion on why Apple would buy Beats is something like “damned if I know.” ~ Harry McCracken (@harrymccracken)
Speculation, Speculation Everywhere But No One Stops To Think
Kontra – as usual – has put his finger on the problem:
You can buy a lot of theories for $3.2B. ~ Kontra (@counternotions)
[pullquote]I think I am, therefore I am. I think. ~ George Carlin[/pullquote]
When Apple spends 3.2 billion dollars to buy something, we feel we need say something — even when we have nothing to say.
Informed Speculation vs. Uninformed Speculation
To paraphrase Mark Twain, the difference between informed speculation and the uninformed speculation is the difference between lightning and a lightning bug.
Premature Much?
[pullquote]Never trouble trouble till trouble troubles you. ~ American Proverb[/pullquote]
Did Apple buy Beats yet? ~ Matt Rosoff (@MattRosoff)
I’m 1,596 words into my Apple/Beats article; it would be really nice to have official confirmation before I publish! ~ Ben Thompson (@monkbent)
Analyzing The Analysts
So far the Beats deal has told us a little about Apple or Beats. But it’s told us a lot about analysts.
The Beats deal is a tech Rorschach Blot: no-one can see what it is so everyone projects their own view of Apple onto it. ~ Benedict Evans (@BenedictEvans)
Conclusion
You came to us, hungry for knowledge. Now, some ~2,000 pointless articles later, you are fed up.
To forget one’s purpose is the commonest form of stupidity. ~ Friedrich Nietzsche
[pullquote]What is left out…is as important as, if not more important than, what is put in. ~ Katherine Paterson[/pullquote]
The analyst’s job (like God’s, but with far fewer resources than God had) is to bring order out of chaos. Creating more chaos is not the way to get that job done. Sometimes one simply has to accept the fact the best analysis is no analysis at all. This is one of those times.
Which reminds me of a story:
Ted Koppel interviewed William F. Buckley on ABC’s popular Nightline show. As the show drew to a close, Koppel said to his famous guest, “Mr. Buckley, we have only a few moments left. Could you sum up in ten seconds?” The loquacious Buckley startled Koppel but endeared himself to viewers when he replied:
No.
I only wish this was Apples Trial balloon and after the reaction they shut it down. Because this one makes no sense.
Beats components:
Headphones:
Overpriced/overhyped junk. How they heck does that fit into Apple?
Brand:
Apple already has a brand. What do they do with a second one?
Music Service:
Fledgling, Nothing special ~100k subscribers, all the music deals would voided on acquisition. There is nothing there either.
People:
Lovine/Dre. Seriously? You think these guys are somehow worth $3Billion?
Apple can afford a $3Billion screwup monetarily. But can Tim Cook afford to look like Steve Ballmer.
“this one makes no sense”
This one makes no sense…yet.
Let’s wait until we know what “this” is before we speculate on whether “this” is good or bad.
And for who “this” is good or bad as well.
Assuming this happens at all.
Even after they announce the acquisition, we really won’t have any better idea on what “this” is, than we do today. With the money talked about they get everything.
But it is really hard to see anything remotely approaching that kind of valuation in this for Apple.
Beats (the Monster Cable of headphones) could even tarnish Apples brand by association.
“Even after they announce the acquisition, we really won’t have any better idea on what “this” is, than we do today…”
You may be right, but I believe that if they go through with this purchase they’ll make an announcement clarifying their intentions. Let’s just wait and see.
If Tim Cook ever looks like Steve Ballmer, the roof falls in at 1 Infinite Loop.
Iovine alone has likely easily made more than $3billion for the music industry. Nothing shabby about Dre and who he has produced, either. This is a serious, broader music industry move if they really do bring the two into the company. This is sort of comparable to when Apple bought Next, not really because of what the Next brand brought to Apple, and really not just the tech, but Jobs. So to me, the money is Iovine and Dre.
Joe
Iovine (I think) seems to bring an almost Jobsian quality to the table re: negotation/deals within the entertainment industry. Plus the curation of music, what if Beats Music is really, really good? That’s worth a lot.
Brand-wise it seems like a fine fit. Beats… by Apple.
I don’t see anything special about Iovine. There are a massive number of music industry insiders Apple could hire for at least 3 Billion less dollars.
Heh, well, if the deal goes through you’ll see how it unfolds. Surely you can see the difference in acquiring Iovine via Beats versus simply hiring some other industry insider. There’s a degree of authenticity lacking in one of those methods. And while we’re at it, why don’t you please name for me a few of the “music industry insiders” (who are peers of Iovine) Apple could realistically hire today.
Maybe, but there aren’t many who have the long track record of Iovine. In the music industry he is virtually a class on his own.
Joe
I can’t remember which news anchor said this, but here is my paraphrase about the evening news “Our job each night is to report the news. Even when there is no news it is our job to make it sound as if there is.”
Joe
“Our job each night is to report the news. Even when there is no news it is our job to make it sound as if there is.”
One of the many reasons why I eschew the nightly news.
Search MacBreak Weekly. Alex, Rene, and Andy all have useful comments on the Beats piece. Leo? Clueless per usual.
“Leo? Clueless per usual.”
Aint’ that the truth!
Leo was starting to bother me more and more and then I changed my attitude and my opinion about him. Leo’s strength is the “breadth” of his tech knowledge. I prefer “depth” over breadth. But without Leo’s breadth of knowledge, we wouldn’t have the wonderful podcasts that Leo is so very good at providing.
As long as Leo keeps inviting guests who are willing to challenge and contradict him (a VERY rare quality), the man deserves loads of credit for the services and information that he supplies to us.
Great website. Lots of useful information here. I look forward to the continuation.