The rumored purchase of Beats by Apple has caused a fair amount of headshaking, but it makes a lot of sense. Sure, at $3.2 billion, it would be one of the larger purchases by Apple, but it's a smart move. Purchasing of Beats would give Apple several advantages, overnight. First, street credibility. With every iPhone and iPod, Apple gives away a pair of cheap earbuds. Sure, they were enhanced recently, but still there's no prestige in those nondescript white EarPods. Beats, however, made it cool to spend $300 on a pair of headphones. And their "b" logo is everywhere, even on smartphones and laptops. It must be painful for Tim Cook to have to sell someone else's headphones in the Apple stores.
I was at the original Monster press conference at the Consumer Electronics Show when Dr. Dre and Jimmy Iovine first introduced Beats. I remember there was plenty of speculation concerning such expensive headphones, but Monster and Beats made it work. In the passing years, Beats decided to part company with Monster, and they have continued to have great success. In addition to headphones, they rolled out Beats Music. Anything that improves on the cluttered iTunes is a plus, and Apple could benefit from a fresh approach. I would like to see iTunes become less of a Jack-of-all-trades and split up music and movies from iOS apps, the way the Mac has a separate Mac App Store.
For me, perhaps the biggest benefit Apple gets from the acquisition of Beats is credibility with the entertainment industry. Steve Jobs had always been a dominant force in the music world, and was able to convince record labels to embrace digital downloads. Since his passing, Apple TV has stagnated and Apple needs a way to speak to the Time Warners, Comcasts, and HBOs of the entertainment world, to make a universal, searchable, à la carte viewing system pay off. The purchase of Beats could be just what the Dr. ordered.