From all indications it appears that the Apple AAPL +1.53% – Beats Electronics deal will come to pass, and as we move forward from the initial leak a week or so ago, many analysts are focusing on the wearable tech part that Beats may bring to the Apple deal.
As I and other industry observers have written, Beats headphones are as much a fashion accessory as an audio accessory, with the balance clearly leaning towards the fashion side of things. There are plenty of other headphones available from serious audio manufacturers that not only sound better but are also cheaper, but virtually none come close to the sales numbers. Beats excels at marketing (much to the chagrin of the serious audio manufacturers), and as a result its headphones are all the rage, especially in the Urban community thanks to co-founder and uber-producer Dr. Dre (“Beats By Dr. Dre” is the brand name).
This scenario is one that’s actually very near and dear to Apple’s heart. It wasn’t that long ago that the iPod was the go-to music device for anyone even remotely into music, and the distinctive white earbuds made exactly the same statement then that Beats makes today, only to a much broader demographic.
The trend continued with the introduction of the iPhone, where you just weren’t hip unless you had one (signified again by the white earbud/microphone), which carried on until the various Android smartphones gained marketshare over the last 12 months or so. As a result, owning an iPhone no longer holds the same status as it once did.
It’s All In The Phone
Smartphones have now made dedicated digital music players superfluous, but headphones or earbuds are the still integral magic link between the music and the consumer. That said, Apple certainly has the wherewithal to design and market their own quality headphones if it wanted to compete with Beats on their own playing field, which makes one wonder even more about this acquisition (leaving Beats Music streaming service out of the equation for the moment).
That said, when it comes to wearable tech, there’s way more than headphones and earbuds. Google GOOGL +1.74% Glass is an example, although reports are that its technology isn’t quite ready for prime time yet. The much vaunted iWatch is another , although we’re still not sure if it’s just a mirage. Bluetooth rings and gloves are other examples, although they’re more output devices than input. The Fitbit tracker is yet another in widespread use. The point is, Apple is only marginally in this space at the moment, but it knows that what’s currently available is only the beginning of the wearable tech revolution. It’s possible that Beats can be a way to accelerate its entry into the space, assuming that the company has more to offer than just headphones. Then again, maybe its only a single piece to a very large puzzle.
The acquisition of Beats may be nothing but a smokescreen by Apple, designed to appease stockholders who question the company sitting on a large bankroll. Even if that’s the case, it may in fact signal a new market for the company, one with at least as much upside as its entry into the mobile world carried. Maybe Apple is a lot smarter than we thought after all.
[Forbes]
