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0 pointsadamlett11y ago0 comments

Obvious? Maybe if the didn't have to pay anything for the company, it would be. But why is it obvious that this acquisition makes sense at that particular price? I'm not saying that it doesn't make sense, only that you have to at the very least consider how much the company is worth to Apple, before you declare it a no-brainer acquisition. Would it still make sense at $4B? $6B? How much would be too much before this is “obviously” a bad deal?

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InclinedPlane11y ago

Beats has a marketshare of something like 2/3 to 3/4 for headphones over $100 and annual revenue of about $1.4 billion in 2013 (1/6 of Facebook's revenue). If anything, $3.2 billion was a steal.

epo11y ago

Citation required for such a handwavy assertion. Beats is a fashion brand and those are notoriously ephemeral. If Beats want to sell they may know the game is up, but then so would Apple.

001sky11y ago

Citation required for such a handwavy assertion

Fashion brands M&A all the time> https://en.wikipedia.org/wiki/LVMH > LVMH is a classic, diversified example.

Even apple is seen by many as a 'fashion accessory'> https://en.wikipedia.org/wiki/IPod_advertising#Silhouette_St...

They ran an entire marketing campaign based on the gratuitious display of earphone cords !!

adamlettOP11y ago

You mention marketshare, but neglect to mention the size of the market. You mention revenue, but neglect to mention profits. For all your numbers tell me, Beats could be operating at a loss in a shrinking market.

And I'm curious: If $3.2B was a steal, what would have been a fair price?

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