The 2014 $3 billion USD acquisition of Beats by Dre was a huge deal for Apple. The deal helped launch Apple Music and folded both Dr. Dre and Jimmy Iovine into Apple’s leadership. The excitement over the addition of Dre and Jimmy Iovine seemed to die out quickly and as time passed their roles seemed to lessen. Now Jimmy Iovine is stepping back even further from leadership and moving into a “consulting” role.
According to The Wall Street Journal:
The departures raise questions about the lasting value of Apple’s largest deal at a time when its acquisitions strategy is attracting new interest with the planned repatriation of some $250 billion in cash it has held overseas.
Beats’ headphones and speaker business has diminished in significance as Apple launches and pushes its own audio products, including AirPods earbuds and HomePod speaker. Beats share of U.S. headphone sales has declined to 37% from 41% in 2014, according to NPD Group, a market-research firm.
“If you ask the question, did they need Beats?, the answer is no,” said Gene Munster, managing partner at Loup Ventures, a venture-capital firm specializing in tech research. “They didn’t need it to get to where they’ve gone in music, and the existing Beats business has not done well.”
In the end, Dr. Dre and Jimmy Iovine got a hell of a deal in the purchase. While their futures with Apple itself probably haven’t panned out as they might have liked, they’re not hurting. It will be interesting to see what Apple has in stores for Beats as a brand. With talk of Apple-branded high-end headphones in the works, some are concluding that the Beats brand may be gone soon.Source: The Wall Street Journal