Dre Vs Apple

The most talked about acquisition of this year, has to be the one between Apple and Beats by Dre. Beats by Dre was co-founded by rap artist Dr Dre, and music executive Jimmy Iovine in 2008. This was a 3 billon dollar deal that had everyone speculating and talking about the acquisition. Many questions arised from just the thought of what does Beats have to offer, that is so value to Apple. Everyone speculated what could be some valuable to Apple that they are willing to pay 3 billion dollars to acquire. The deal included that Apple pay $2.6 million up front and another $400 million paid out over time. Apple’s acquisition of Beats by Dre was Apple’s largest acquisition thus far. Prior to this acquisition, Apple’s biggest acquisition was NeXT, in which Apple paid $400 million in 1997. The European Union had to approve the acquisition, indicating no concern over headphone competition because “the combined headphone market share of Apple and Beats by Dre is low.”

My guess is the technology advance in the Beat by Dre was uncompromised. Beats by Dre, is not just a run of the mill hardware, where you can buy their headset or headphone for low prices. The headphone are priced as a high priced quality hardware that consumers are willing to buy and pay the higher prices to have. My speculation is that since the Beats by Dre, are high quality and had not comprised on the price of the product, is what made the whole acquisition feasible for Apple. Apple hardware is one of few companies that are able to sell their products and hardware with an above the market price, and consumer are willing to pay the higher prices for the product. There are not many products who can meet the consumer’s expectations in the hardware industry. The Beats by Dre brand has its own group of elite consumer that is similar to the Apple