Apple and Beats: let it be

Since Friday the web has gone into a frenzy caused by the Financial Times’ report that Apple is set to buy Beats Electronics and Beats Music for $3.2 billion.
We’ve heard every single facet of that argument: why buying Beats is bad for Apple, why buying Beats is good for Apple, what Apple may or may not do with the company and so forth.

This is all very exciting for industry insiders that can get lost in the intricacies of hypotheticals on product roadmaps, licensing deals, or the question marks related to the two companies’ brand names and how they will mesh in a way that doesn’t replicate the doomed HTC deal.

In the end though - if the deal does indeed close - it all comes down to a roadmap from Apple that we have absolutely no insights on. Whether buying Beats is good or bad for Apple entirely depends on the company’s plans for the next five years which could make it a shrewd investment or a panic buy and a waste of money.

This is true especially on the hardware front, as Apple has been patenting headphone-related tech lately which it would make sense to implement on a range of headsets that is mature and with a variety of designs rather than having to start from scratch. But as always Apple’s product cycles move in mysterious ways and it could be years before we start seeing the outcome of this acquisition in a productised form.

From a Beats Music perspective, the question marks are really too many. Apple had supposedly already created an internal version of a streaming service - which ended up being morphed into its iTunes Radio product to avoid cannibalising downloads. Was this Alpha version so bad that it warranted purchasing a service like Beats? It is also doubtful that the company will be able to keep the licenses that Beats negotiated thus far, meaning that it will have to enter lengthy negotiations with labels in order to properly integrate the service within the iTunes experience. And then there’s the not-insignificant question around how the company will handle a transition from downloads to streams considering that in a number of international markets where iTunes has only recently launched downloads are still growing.

Ultimately, success comes down to user perception and user experience. Whether Apple decides to swallow up Beats and re-brand its products or keep it as a stand-alone parent company with a tight integration on the R&D and music services front the success of either strategy is going to be dictated by its implementation and how the conversation with existing Apple users and Beats users is framed.

Apple has to make a big move to avoid becoming irrelevant in the digital music space. Buying Beats could be that move, but there are way too many moving parts in this equation to really know or judge whether this was a thoughtful acquisition or a waste of money.

For now the best we can do is - if and when the deal is confirmed - let it be and wait until some of these moving parts start falling into place.


(Andrea Leonelli)