Why did Apple acquire Beats through Spotify

Digital - That's why Apple bought Beats

At first glance, Apple's $ 3 billion price tag for headphone maker Beats makes you frown. At second glance, however, the purchase makes perfect sense.

Despite their great popularity - especially among younger consumers - the “Beats by Dr. Dre »among connoisseurs not as high quality headphones. Technically speaking, there is obviously nothing special hiding behind the red "b" that Apple might be keen on. What Beats has to offer and what its buyer has been lacking so far is access to the music streaming business. An important strategic key, Apple wants to continue to play a pioneering role in the digital music revolution in the future.

Discontinued model for music downloads

The iTunes store marked the beginning of legal music downloads on the Internet in 2003. Since then, Apple has never tired of emphasizing that music is something you want to own and collect. The latest developments in the online music business have forced Apple to rethink: In 2013, music sales via iTunes not only stagnated, but also declined for the first time in its history.

At the same time, streaming services like Spotify are currently seeing an annual revenue increase of 50%. Despite several attempts with ping and iTunes radio, Apple has not yet managed to meet this obvious consumer trend on its own

Beats Music is the first subscription service done right.
Author: Tim CookCEO Apple

The ready-made solution is called Beats Music

Apple obviously didn't want to lose any more time in this rapidly changing market and has incorporated a ready-made solution with “Beats Music”. For $ 10 a month, Beats Music gives you unlimited access to music on your smartphone, similar to Spotify. For the time being, however, only in the USA, which is why the service was hardly known in this country.

Apple announced that the streaming service Beats Music, which is available for iOS, Android, Windows and in the browser, will continue to run independently for the time being. The “Beats” brand should also remain in place.

Apple and Beats - the perfect complement?

What will Apple do in the future with its new employees and Beats founders Dr. Dre and Jimmy Iovine are planning, one can only speculate about that. It would be conceivable, for example, that Apple could add music streaming to every iOS device for free or at a very attractive price. In contrast to Spotify & Co., Apple does not have to make a profit from streaming.

More important for the group is the claim to continue to play a leading role in the digital music revolution. The computer giant should therefore primarily be concerned with being able to continue to offer its customers music services that they want and thus continue to stand out from the competition.

Apparently Apple trusts Dre and Iovine to know pretty much what makes the new generation of music customers tick. For its part, Apple has 800 million iTunes accounts, most of which are said to be linked to a credit card. Not a bad pairing, at least on paper.