Home News Apple’s $3 billion purchase of Beats has already paid off | Engadget

Apple’s $3 billion purchase of Beats has already paid off | Engadget

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Apple buys beats

“Oh shit, the Forbes list just changed,” Tyrese Gibson proclaimed in a 2014 Facebook video˳

“The first billionaire in hip-hop, right here from the motherfucking West Coast,” Dr˳ Dre chimed in˳

It’s one thing to discuss sensitive business info in a celebratory social post, but it’s another thing entirely to basically announce the deal was done˳ It was objectively a crazy thing to watch unfold˳ The official announcement wouldn’t come until May 28th, when Apple put a bow on its $3 billion purchase with a press release and photo˳ That price tag still represents Apple’s most expensive acquisition˳

Perhaps the best account of those events comes from Beats co-founder Jimmy Iovine˳ He found out about the video when Sean Combs (P˳ Diddy, Puff Daddy, Diddy, Puffy) called him, yelling, around 2AM˳

“We had gone for like six weeks without it leaking,” Iovine explained˳ “This thing has leaked, this thing is loud˳” He said he warned Dre “don’t move” that weekend˳ And … welp˳

You can hear the story from Iovine on the first episode of HBO’s The Defiant Ones, but his side isn’t any less insane˳ “I had been wanting to work with Apple, at that point, it’s probably 10 years,” Iovine said in an interview for the show˳ “Sure, I thought the deal could blow˳”

Luckily for him, Dr˳ Dre and Apple, it didn’t˳

Let’s back up a bit˳ Beats Music wasn’t entirely built from the ground up˳ The company bought streaming service MOG in 2012 and, before shuttering it two years later, transformed the pieces into its own subscription option˳ MOG’s key features included a handy playlist generator and Pandora-like artist radio stations˳ Beats would put a lot of stock in curation as well, mostly around emotion and personal preferences˳ It also had help from creative powerhouses like Trent Reznor, who continued to work with Apple following the acquisition˳ The first time you fired up Beats Music, you were met with a tap-driven questionnaire that learned your tastes˳ The service didn’t exist for very long on its own, as Apple would buy Beats just four months after it launched, and before the end of 2015, Beats Music was gone for good˳

Beats Music

Hours after the deal was official, Cue and Iovine appeared at Recode’s Code Conference to discuss the day’s events˳ The Apple VP made it clear he felt Beats Music was the “first music service done right,” referring mainly to the focus on curation and playlists˳

“It was a no-brainer for us,” Cue explained at the event˳

Apple had iTunes and its massive catalog of digital music for purchase, but the iPod generation was coming to an end˳ It needed an on-demand subscription service to keep up with the industry’s pivot, and rather than build its own, it decided to buy one˳

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” Tim Cook explained when Apple bought Beats˳ “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world˳”

Indeed, Apple Music would launch in June 2015, and amass 10 million subscribers by January 2016 – 20 million paid users that December˳ Less than two years later, and after some redesigns, it would double its tally to 40 million˳ Sure, the company hasn’t caught Spotify globally, and it may never be able to˳ But in the US, Apple reportedly has more paying users than its biggest rival˳

On the streaming side alone, the investment has paid off˳ Apple has cemented itself as a key player in the most popular way people now listen to music˳

Beats headphones have been (rightfully) criticized for too much bass, and for their cheaper build quality that relied more on brand recognition than good design˳ In recent years though, that’s changed˳ The tuning on the Studio3 wireless, specifically, stood out to me as a new sound profile for Beats˳ There was still plenty of bass but it was no longer overpowering, and thus the headphones were much more enjoyable to use˳

“We thought we were pretty good until we got to Apple, and then we started learning what ‘good’ really was,” Beats President Luke Wood told TechRadar last month˳ “Apple had so much incredible discipline and rigor around product quality˳” He would go on to explain that in the early days of Beats, “no one was making headphone products to articulate the bottom end˳” However, the company didn’t ignore its critics, and Wood noted that the bass-heavy reputation was “absolutely taken into consideration” when the company was building its first true wireless model: the Powerbeats Pro˳

In a lot of ways, Powerbeats Pro epitomizes how being part of Apple has affected Beats products˳ The W1 chip has been replaced by the H1 found in the latest AirPods˳ In addition to fast pairing, quick charging and more-reliable connectivity, the H1 chip enables Siri to be always listening – without you having to press a button to summon it˳ The sound quality on the Powerbeats Pro is also much improved: better tuned to keep plenty of bass, while not sacrificing the detail from the mids and highs˳ It’s hands-down the most well-rounded, best-sounding set of Beats headphones˳

Overall, Beats products have improved over the past five years, and Apple can take most of the credit˳ Of course, better Beats headphones now affect its own bottom line and will do so for the foreseeable future˳

Working on its own, this could’ve taken years to build, and even then, it may not have been as good as what it has done with the help of Iovine, Dr˳ Dre, Reznor and others˳ Apple bought a company, commandeered its assets and retained its talent to keep the records spinning as it’s done many times and will continue to do˳ Five years later, business is booming, and that’s business as usual in Cupertino˳

Images: Apple (Apple Music and group photo); Beats by Dre (Beats Music); Andrew D˳ Bernstein via Getty Images (LeBron James); Beats by Dre (Powerbeats Pro)

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