Apple is a massive company that has acquired many other businesses, but did you know that Apple purchased Beats in 2014? Are you wondering, why did Apple buy beats?
Well, I have been looking into this question and have several reasons why Apple bought Beats below so keep reading to find out what enticed Apple to make this business move!
Why Did Apple Buy Beats in 2023?
Apple bought Beats because it was a very valuable company making over $1 billion in sales just in headphone sales during 2014. Furthermore, the talent behind Beats with Interscope Records co-founder Jimmy Lovine and audio engineer and rapper Dr. Dre made it appealing to Apple. Also, Beats Music was successful whereas iTunes was a sinking ship.
Do you want to know even more about why Apple bought Beats? If so, don’t stop reading because I have more to share below!
1. The Talent Behind Beats
One reason Apple bought Beats was that Jimmy Lovine and Dr. Dre created Beats, which are two of the biggest names in music and two incredibly talented people.
For example, Dr. Dre is one of the most iconic rappers of all time and he is also an audio engineer and amazing record producer.
Then, you have the co-founder of Interscope Records, Jimmy Lovine, and Interscope Records is one of the most successful music labels to be created.
Furthermore, Apple looks at reputation and talent when acquiring products or services, saw the talent behind Beats, and knew it was worth buying.
2. The Headphone Market Is Booming
The headphone market is booming these days, and Apple noticed back in 2014 that headphones were becoming a lucrative business, so it purchased Beats to stay ahead of the big boom.
To illustrate, the headphone industry is worth well over $1 billion a year, so buying Beats in 2014 allowed Apple to rake in the cash as more people looked to headphones for their devices.
3. Beats Music Had Good Reviews
The Beats Music Streaming Service had pretty good reviews, and since Apple had music streaming thanks to iTunes, it made sense to combine the two.
Furthermore, combining them could make an even better music streaming service through rebranding and would give Apple even more revenue by eliminating some of the competition.
Also, Apple took about a year to optimize Beats Music and add features so that it could make the music streaming even better instead of just combining them.
4. Beats Electronics Was Valuable
In 2014, Beats Electronics made over $1 billion in sales just on the headphones alone, which made Beats Electronics incredibly valuable.
At the time, Beats was one of the biggest in the world.
In addition, at that time, Apple was developing AirPods, even though AirPods weren’t released for two more years, so Apple saw the revenue from Beats and knew it was worth buying.
5. Eliminate Competition
As mentioned, Apple was in the development of AirPods, so it made sense to purchase Beats because it was so valuable that it was actually competition.
Therefore, by buying Beats, Apple was eliminating one of the biggest competitors it would have when the company released AirPods.
6. It Made Apple Cool
Apple wanted to be cool and appeal to a certain demographic and age group.
So, purchasing Beats was a great way to achieve this, and also win back some younger people it had lost.
Furthermore, Beats was so popular because of its association with Dr. Dre, one of the most popular rappers in the world, attracting all different age groups.
The love people have for Dr. Dre and the desire to purchase Beats headphones is one reason why Apple wanted to buy Beats, since it made the company look cool and hip.
7. Apple Realized iTunes Wasn’t Successful
Apple had a lot of trouble with iTunes and it wasn’t a winning strategy for the company, since no one wanted to pay $0.99 for a music download. Therefore, Apple shifted its strategy.
In contrast, Beats Music was a subscription-based service. Apple saw how successful Beats Music was, and knew iTunes wasn’t going to achieve that without a big change.
8. Beats Brought Better Design to the Audio Market
Apple was primarily known for audio in computers and other similar devices in 2014.
So, what Beats brought to the table was the experience in designing headphones and designing them well.
Furthermore, Apple didn’t have the experience Beats had with designing headphones and knew it would be better to add Beats onto its line to improve the audio quality of its own headsets.
9. Beats Had Headphone Manufacturing Experience
Beats knew how to manufacture great headphones and that showed in how valuable the company was, which is one reason why Apple purchased Beats.
For example, the manufacturing of the components would help Apple with its line of devices, such as manufacturing computers and tablets with better audio components.
To know more, you can also read our posts on whether Apple Pay is international, whether Apple Radio is free, and whether Apple Refurbished is worth it.
Apple bought Beats because it was known as one of the most valuable and successful headphone makers in the world and it was cool so it appealed to younger generations.
Furthermore, Apple wasn’t having success with iTunes like Beats was with its subscription service Beats Music, and Apple wanted to shift strategies.