Apple + Beats: Buying headphones or buying 'cool'?

The world’s most valuable technology company is apparently set to finally spend some of its not inconsiderable war-chest on making a major acquisition – the sort of thing that Facebook and Google do every other week. In its sights is headphone super-brand Beats, for a cool $3.2 billion (£1.9 billion).

Created by Jimmy Iovine and Dr Dre, who is doing his best to make sure no-one has ‘forgot about Dre’, the headphone brand has gone from strength to strength.

The proposed buy has been met with some fervent support and some stiff opposition, so here’s a brief rundown of what Apple stands to gain or lose:

Apple’s buying ‘cool’ – While there’s no doubt Apple’s star still shines brightly, it’s definitely lost a bit of its glow to the younger generation. This is partly down to a perceived lack-of-innovation and partly down to the fact an emotive challenger brand has become a stable, dominant industry leader.

Many have claimed Apple buying Beats equates to Apple to buying some ‘cool’ back. That sounds a bit desperate for an incomparably large tech-giant and it’s hard to know exactly how Apple would cash in on that ‘cool’. That’s ignoring it’s pretty uncool in itself to need to buy cool. Even so if Apple can come out of that relatively unscathed they’ll own one of the world’s most prominent audio brands at the moment, with the opportunity to incorporate the attractiveness of Beats into Apple’s own offering wherever they like. Free Beats headphones with iPhones for example could become something that Samsung and HTC find impossible to match.

Apple’s buying audio credibility (if not quality) – Beats certainly come with credibility, I’m sure it wouldn’t be too hard to argue Dr Dre knows a bit more about music than Tim Cook. But the critics aren’t actually all that fond of Beats either, with them being regarded as heavily over-priced for how good they really sound. Not to mention accusation on it being reliant on style over substance. Some commentators are claiming with Apple’s past reputation for striving for the best of everything in hardware that buying Beats doesn’t represent a quality-led acquisition. Nevertheless they’re much better than Apple’s current headphones which represent one of Apple’s most common sticking points in the consumer markets – but it’s a $3bn spend on a technology Apple already fundamentally has.

Apple’s getting a leading streaming service – Beats has a streaming service, Beats Music, it’s not the best or the biggest, but its successful and unlike many others it’s paid subscription only and so far people have been willing to pay $10 a month for the service. Apple on the other hand has seen its iTunes market greatly eroded by streaming services, something iTunes Radio (their one year old streaming offering) has been unable to compete with. Realistically though, if Apple were desperately after a streaming service then Spotify, Rdio or Pandora would be much better buys, so that suggests the Cupertino company are at least partly interested in Beats hardware and brand equity.

What Apple’s really getting – All of those things, but not without drawbacks.

All in all despite it being Apple and Beats, two brands known for their showstopping drama, it’s a bit of a safe buy. Just how wrong can it go? It’s a solid brand with a solid product with a bonus streaming service. There’s nothing there Apple doesn’t want, but nothing that’s going to fundamentally change the landscape of consumer tech. It's neither marketing victory, nor marketing disaster.

The can of worms that’s potentially being opened though is – are Beats headphones without an Apple logo cooler than those with an apple logo? Does it matter if they are.

With all the money in the world Apple is going out and buying something it largely has, with a not outstanding reputation of quality or innovation. From my perspective this acquisition is all very ‘new’ Apple, not ‘old’ Apple – safe, rational and loosely uninspiring – but with the potential to masquerade as the opposite. The fact that we're talking about Apple buying someone who just makes headphones, rather than Apple's latest jaw-dropping innovation says more than almost any acquisition could.