It did seem absurd that Apple corporate would spend $3 billion to deliberately drop out a competitor from the market. This summer the company purchased Dr. Dre’s Beats headphones and Beats music service, then yesterday, TechCrunch falsely reported that the streaming service would be axed.
Rumors that could have be supported by the exclusion of the Beats music app from the iPhone 6 or iOS 8 update, however according to Tom Neumayr Apple’s PR rep, Tech Crunch got it wrong. Via ReCode:
Tom Neumayr, Apple’s PR rep, says the TechCrunch story is “not true” but wouldn’t go beyond that.
I can elaborate a bit more, based on conversations with people familiar with Apple’s thinking: Apple won’t shutter the streaming service. It may, however, modify it over time, and one of those changes could involved changing the Beats Music brand.
Apple’s Tim Cook recently explained why they wanted Beats in the first place:
“And so, one night, I’m sitting playing with theirs versus some others. And all of a sudden, it dawns on me that when I listened to theirs for a while, I feel completely different. And the reason is that they recognized that human curation was important in the subscription service, that the sequencing of songs that you listen to affects how you feel. I think they’ve done a fabulous job with their brand. It’s hard to describe. But you know it when you feel it. And so, that night, I couldn’t sleep that night. And so, I was thinking, ‘We’ve — we need to do this.'”
Agreed. Why would Apple dump this app that sells with their expensive headphones? This subscription service could eventually compete for Pandora or Spotify’s established customer base pleasing Apple’s wealth investors with more money. Apple did just sell 10 million new phones, over the weekend too, proving they can afford to make major acquisitions and develop them. Meanwhile, Dr. Dre is Forbes Hip-Hop Cash King, so it looks a good deal for all involved.
Oh yeah… And about those Beats: