Some Views on Apple Inc. (AAPL)’s Rumored Plans to Buy Beats Electronics

0

Taking into account that Apple Inc. (NASDAQ:AAPL) is one of the most popular companies, it’s is important always to follow what those guys are up to. In a piece of recent news, Bloomberg reported that Apple is planning to acquire Beats Electronics LLC, a manufacturer of audio products and equipment, in a deal that could amount to $3.2 billion.

apple inc (nasdaq:AAPL)

In a report, CNBC’s Jon Fortt has discussed this deal and the benefits that it might bring to both companies. Surprisingly or not, he considers that the deal doesn’t make a lot of sense, since Beats’ streaming business had been built on a technology purchased for less than $20 million, which place the $3.2 billion price offered by Apple Inc. (NASDAQ:AAPL) too high. At the same time, all of Apple’s segments, in which Beats also operates, are doing great, and the size of the latest acquisition is smaller in comparison to them.  Moreover, since the design of Beats’ products is different from Apple’s design principles, the latter would have to destroy the brand.

Brian Blair of Rosenblatt Securities also said that the deal doesn’t make sense to him either. However, he considers that if Apple Inc. (NASDAQ:AAPL) was considering acquiring Beats, it would not be for the “plastic headphones,” but rather for its streaming business. Mr. Blair stated that the downloads from iTunes have been declining on the back of an increased popularity of music streaming services, such as Spotify. In this way, the acquisition of Beats, could really help Apple Inc. (NASDAQ:AAPL)  to improve its iTunes platform.

The full video can be watched below:

At the same time, in another video on CNBC, David Garrity of GVA Research, stated that the acquisition of Beats is a good deal, especially taking into account that Apple Inc. (NASDAQ:AAPL)  has around $150 billion in cash. So from the financial point of view, the deal makes sense, even though it does not enter Apple into a new segment, which investors have been expecting.

David Garrity’s view on the deal can be watched below:

Share.

Leave A Reply