Apple has agreed to pay $3 billion to buy Beats – as noted earlier, Beats produce high end speakers and music gear and a streaming music service
The company was founded by rapper producer ”Dr Dre” aka Andrew Young and Interscope-Geffen Records chairman Jimmy Iovine.
What is interesting to read is that Beats main “intangible asset” is something Apple finds itself in need of: coolness. Well, is this true? Has Apple lost its coolness, did Apple ever have coolness and could the cult-like status of Apple be defined as “cool?”
What has got everyone in the business abuzz with conversation and opinion, is the price that Apple paid for Beats. A mere sum of USD3billion.
Beats got into the streaming music business in July 2012, when it acquired MOG for between $10 and $16 million, but didn’t launch its new service until this past January. Since most analysts seem to think that streaming service is the core value brought by Beats, we have to agree that was quite a good investment. This deal is telling us a few things, and it’s important for retailers to take note.
1) The rate of social and technological change continues to escalate.
It was only seven years ago that Apple introduced the iPhone. Completely transforming the way we communicate, shop and take photographs was good enough for a while, but by September 2013, Samsung was mocking iPhone users as old and out-of-date. That’s fast. Financial Analysts are clamoring for something NEW from Apple. Beats is part of that solution.
2) Wearable tech is the next big thing.
There’s no escaping it. Bose headphones may be the status symbol of business folk on airplanes, but the young’uns are wearing Beats. And the Beats brand is going to move way past headphones into apparel and footwear. Wearable tech will be way cooler and useful than that.
Fitbit was only the beginning. If you’ve ever used the device, you know it’s basically a glorified pedometer. Not so helpful if your exercise of choice is swimming or weight lifting. I see tech embedded in all our exercise equipment, chips monitoring various vital signs. Even us older folk will gain opportunity from these embedded technologies. And they are going to look good. Circling back a few months, I think that’s the answer to the question “Why would Apple hire Angela Arendt away from Burberry?” Because it’s all going to converge. Fashion is fashionable tech.
What about the store?
What can retailers use?
Respondents to our annual store benchmark survey see an opportunity coming. Thirty-one percent highlighted in-store technology as a top-three way to react quickly to changes in the business environment, up from 15 percent last year.
in-store tracking is not going to be the solution. And it’s not going to be mobile payments either. It’s going to be a combination of things:
- Self-directed solution seeking by shoppers. In other words, they have to be driving the questions and in-store employees may be required to deliver the answers
- Digital touch points anywhere and everywhere that provide a consistent customer experience
- More innovative products that turn them on. Food is a necessity of life.
- Fashion is fun. Fashion can be the cool new device, or it can be a cool new outfit. Ultimately, it will be a combination of both.
Tim Cook is a smart guy. He ‘smelled’ the death of Apple cool coming, and has started taking steps to change the game. He may not be Steve Jobs, Instead, he’s being like an orchestral conductor, bringing together the best people, products and solutions he can find. That’s probably the most important trait most CEOs can hope to have.
iPhone is still the hottest phone to have in NYC, despite Google’s omnipresence. I do believe that streaming was a big a focus of the acquisition. Despite the power of iTunes, streaming services like Pandora have thrived, when all bets would have been that they were to be crushed by iTunes. So Apple buying into Beats gives them both sides of selling a very lucrative virtual product, music, without having to build any infrastructure or market a service.
Craig Page-Lee is the MD of Posterscope – SA’s leading Out Of Home specialists. He is passionate about retail and has a background in design and architecture and one day dreams of heading off on a world adventure on his motor-cycle.
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