Report: Apple subsidiary Beats sales are hitting $1 billion a year

According to a media report, Apple is very satisfied with its acquisition of audio manufacturer Beats, which also includes a music streaming service. Beats Music (also known as “Beats by Dre”) and Beats Electronics were sold to the iPhone maker in 2014 for $2.6 billion in cash and $400 million in Apple shares. Bloomberg reporter Mark Gurman, who is usually well-informed about Apple matters, wrote in his newsletter on Sunday that the subsidiary now generates “a billion dollars a year” for Apple. Apple has “no regrets” about the purchase.

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Beats Music as the basis for Apple Music

What is often forgotten regarding the Beats purchase is that the music service Beats Music, which was acquired along with it, ultimately laid the foundation for the success of Spotify’s competitor Apple Music, which launched in 2015. It is part of Apple’s ever-growing services business. When it came to the Beats acquisition, there was still criticism that neither the team there nor the products justified the high $3 billion price tag – at the time and even today, it was Apple’s largest acquisition ever. From a business perspective, the deal proved to be a “huge success,” Gurman said.

In fact, Apple is using Beats technology to complement its audio business. If you don’t want to buy expensive AirPods products, you can choose cheaper Beats hardware. This is not devoid of controversy, as it often contains a lot of plastic and is renowned for being bass-heavy. Apple recently launched cheap Bluetooth headphones, the Beats Solo Buds, without a battery in the charging box and without ANC noise cancellation – reviews are mixed. The Apple subsidiary has still managed to find key marketing partners. Products that are not yet available appear on VIP’s Instagram account.

Beats products feature Apple technology

Buying a Beats product can be beneficial if you want to get Apple audio technology relatively cheaply. The group installs identical sound chips in devices, which also enables modern functions such as sharing audio or quickly switching devices.

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The sound has also gotten better and more neutral over the years. Also, Apple first used USB-C ports in Beats – also because they always work well with Android devices – before ending up in AirPods (where the transition from Lightning still hasn’t been made). With Beats, Apple is successfully adopting a multi-brand strategy.

(B.Sc.)