Disclaimer #1: I completely suck at picking stocks, and offering insight into the stock market, which is why I do not manage my own investments. Evidence is littered all over these posts.
That said, I’m calling something of a top in Apple on the basis of paying $3.2B for Beats. While the NY Times and O’Reilly editor Mike Loukides call out the two extreme views (Apple is a luxury brand, Apple wanted the streaming service), my view is much more cynical.
— Mike Loukides (@mikeloukides) May 18, 2014
Disclaimer #2: Mike Loukides edited my first O’Reilly book, and I provided technical input on one of his, and he remains one of the most pragmatic technical writers I know.
The basis for my cynicism is that I’ve tried Beats headphones, in both the earbud and over-ear styles, and I don’t like them. I find them way too bass heavy, subtracting from the color and richness of the source material, and if you read the comments on amazon.com, their quality is lacking. I’m not sure of the actual demographics of their product sales, but a quick sampling on the NYC subway shows the Beats crowd is largely male and young. That’s a microcosm of, say, the iPhone demographic. Teenage and early-20s men are not a long-lived style-driven market; and likely not one worth more than $3B.
If Apple did buy Beats for the streaming service, why wouldn’t they just build their own? Backend technology mergers are always messier than they appear, and Apple certainly doesn’t need the online eyeballs (or earballs, as my sister used to refer to listening capacity). What I see is Apple buying someone else’s (possible) innovation, buying in deference to current high-end style definition, and buying a low quality product. If you believe that technology runs in cycles (either 25-year long cycles or waves of 10-year cycles), then the cycle begun when Jobs rejoined Apple at its helm is in its denouement. It’s just a very bottom-heavy tail end.