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Pundits are saying it makes no sense for Apple to buy Beats because the Beats headphones are expensive and technically inferior compared to the competition. All Beats does is successfully make millions of consumers lust for its product by using extraordinarily clever design and marketing. It's almost as if the Beats co-founders have some sort of reality distortion field.

Wait, why does that sound familiar?

To my ears, Beats plus Apple sounds like the most perfect match of all time.

Apple can improve the Beats sound quality if it chooses to do so. So that's not a problem so much as a business choice. And buying Beats is a good way to get into the streaming music business quickly, which had to happen because iTunes is a dinosaur with arthritis. And when you buy Beats you get Jimmy and Dre in the deal, and that team might be worth more than all the other Beats assets combined.

Apple's biggest problem lately is that it is charisma-challenged, which makes investors distrust their future vision. That just changed. They just bought a shitload of charisma.

No one can predict how the Beats deal will go. Any deal of this scale and complexity can go bad for any number of reasons. But if you have a strong and unwavering opinion that Apple buying Beats is definitely a mistake, you're either a genius or an idiot who thinks he's a genius. Good luck sorting that out.

Disclosure:
I own Apple stock. I also own several Apple products, half of which are overpriced and inferior compared to the competition. The only reason I don't own any inferior and overpriced Beats headphones is because for some reason they don't make it easy to buy an adapter that will work with my Windows computer. Yes, I've tried to purchase Beats headphones for irrational reasons and failed. That makes me sort of a double-idiot. But I take pride in being aware of it.

[Update: In my defense, two separate employees of Best Buy assured me I would have to search online to find an adapter because  Beats wouldn't work on my Windows computer. Apparently the common problem is the employees at Best Buy because, as some of you noted, my Apple earbuds do work on my Windows computer. -- Scott]

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Scott Adams

Co-founder of CalendarTree.com

Author of How to Fail...

 

 




 
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May 13, 2014
Anyone else baffled by the silicon valley founder who can't plug headphones into his computer?

My wife is a web designer who has the same "gift" when it comes to consumer hardware. Can't figure out how to use a product with only one button.
 
 
+3 Rank Up Rank Down
May 13, 2014
I agree that Beats sounds like it has the same strategy as Apple. The problem for Apple is that it should be the one out-innovating others -- even if only on style. Paying such a high price seems like admitting that Apple has lost it's magic and needs to acquire products/businesses that have the mojo -- and pay dearly for it.
 
 
+1 Rank Up Rank Down
May 12, 2014
The Beats acquisition is almost certainly about street cred, the streaming service, etc., as you say. But the similarities between the two companies are more stark than the picture you paint. Headphones are truly, deeply commoditized; you can buy really good headphones (that work on Windows!) for much less than a pair of Beats phones. I realize you are not condemning Apple with your inferior !$%*!$% but what you are nerd-raging about there is that you can get more gigabytes for less on the competition, crap that almost no one cares about. Other computers can't do what Macs can do (nerd-ragers see: Windows VM on Mac). So it's not an apples-to-apples..oh crap I just.. I'll see myself out.
 
 
May 12, 2014
I don't really have a dog in this hunt, given that I wouldn't recognize Dre if I passed him on the street, and have absolutely no idea who "Jimmy" is, unless we're talking about the South Park character. The only Beats products I've ever purchased were knockoffs at Silk Street in Beijing -- I bought a bunch of earbuds at about $5 each because, why not? Turned out the sound quality was lousy, which I attributed to them being knockoffs, but from the, ahem, sound of things, maybe not.

So I don't know whether this is great for Apple or not. I do know, though, that you can't buy cool. If Apple is doing this for image, they're not going to be happy with the results. And I can't imagine that Apple can't get themselves into the streaming music business the old-fashioned way, i.e. combining home-grown, average products with great marketing. Buying your way into an industry has always been more MS' style.
 
 
May 12, 2014
Like everybody else, I'm baffled by your Windows problem. Are they wireless headphones? That's the only way it makes sense.
 
 
May 12, 2014
>> iTunes is a dinosaur with arthritis -
That deserves a million thumbs up
 
 
May 11, 2014
$3.2 million? Beets are $4.89 a can.
 
 
May 11, 2014
Oh, oh... It's not the Windows computer. It's Scott's electrical hardware curse, like his effect on the street lights!
 
 
May 11, 2014
My daughter has used her Beats on her Windows laptop for about two years now. No issues.
 
 
May 11, 2014
Love your definition of iTunes. And Apple have had their fingers in their ears for years about it.
 
 
May 11, 2014

[Go plug your Beats into your Windows computer and tell me how that went. -- Scott]

My Beats work fine on my Windows 7 PC. Is it a Windows 8 thing?
Are you sure you're not plugging them into the microphone port?
 
 
+2 Rank Up Rank Down
May 10, 2014
An adapter for headphones? I am sure you are aware that *almost* all headphones are standard sockets. If a Beats headphones fits your smartphone, it will fit your computer.

Unless your "double-idiocy" goes beyond buying overpriced and inferior gadgets.

[Go plug your Beats into your Windows computer and tell me how that went. -- Scott]
 
 
May 10, 2014
Yeah, but for $3.2 billion???? Maybe a billion, but . . .

It's like the nerdy kid in the movies trying to buy his cool cred by paying off the hottest chick in class to date him for his senior year. It seems a little excessive; what did he really end up with in the end? A lot less money and no more cool. And he probably didn't get, er, satisfied, either.

So what did Beats bring in last year? About $500,000,000. Not bad, but what were their earnings? Even at three times revenues, Apple overpaid by about 100%. I know that Apple has more cash than the US Treasury (that's true, by the way), but is this really the best way to spend it?

I don't know. When a company like Apple starts substituting acquisition for innovation, it might be time to consider diversifying your investment in it. I don't own any Apple stock, as far as I know, because I'm invested in a diversified portfolio made up largely of ETFs.

Exciting? No. Scott's having a lot more fun trading his investments than I am. But Scott can afford to lose tons of money. I can't. So give me boring any day.

Might have been good advice for Apple, too. I guess we'll see.
 
 
 
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