Apple & Beats

Apple’s potential acquisition of Beats is all everyone can seem to be discussing – on blogs, twitter, and the podcasts I listen to. It is a strange acquisition, and since we know nothing, I like what @siracusa said on a recent episode of ATP about “building your own acquisition”. And just like everyone else, I feel compelled to add my thoughts:

  • Beats is a fashion brand as much as a headphone manufacturer.
  • Apple just a hired Angela Arhendt, the (now) ex-CEO of Burberry. Apparently they’ve also hired the former CEO of Yves St. Laurent, Paul Deneve.
  • One of my first memories of the iPod are the silhouetted, colourful ads. This always Struck me as very fashionable
  • Yes, maybe Steve Jobs would never had executed an acquisition such as this…an established brand with a big consumer mindshare; but this is no longer Steve Jobs’ Apple. And I dare say, he would want Tim Cook to make Apple his own.
  • There is nothing wrong with “Beats by Apple”
  • I’ve generally stayed away from earphones / headphones that cost more than $/£ 40. This is because I’ve been burned by a more expensive pair of in-ear monitors stopping to work after not very long. I generally treat mine pretty badly, because I travel a lot, throw them in pockets, and crumple them up.
  • I would likely buy a pair of Beats by Apple. Especially if it integrated some kind of “quantified-self” sensor.
  • Most of my friend or family circle would not buy a pair of Beats by Apple.
  • I’ve never used the Beats music streaming service. It’s not available in the UK. I do use, am a generally a fan of, Spotify.
  • I don’t know or understand whether Apple would need to renegotiate streaming contracts. But I do understand the benefit of having people who have strong relationships within the music industry. Iovine and Dre will be critical in any future music deals. All business is done based in relationships.
  •  iTunes has been around since 2001. What if, just what if, Apple retired the iTunes brand in favour of Beats? It would be the ultimate canabalisation, quite likely something that only Apple is capable of. iTunes on the Mac needs a huge refresh, it’s become a beast of an application.
  • I do wonder how this acquisition will go down within Apple, culturally. This is probably the biggest risk.

The new iPad

Yesterday, on the way to visit family out in Essex, Reva and I stopped by the Apple store at the Westfield mall in Stratford. But I think a more accurate description of events would be that I dragged Reva to the Apple store at the Westfield mall in Stratford. It was the day after the release of the new iPad aka the third generation iPad and I wanted to get a glimpse of the screen that had been described as “resolutionary” by Apple’s marketing but had also been talked up greatly by all the blogs and podcasts I’m subscribed to.

Overall, yes the screen is a lot brighter and sharper, but to see the difference I really had to compare it to the iPad 2. I do see the difference between the iPhone 3G and iPhone 4S, but only on close inspection. I don’t know if the difference would be noticeable to me in daily use. In fact, I’d say it isn’t because I regularly use both an iPhone 4S and a Nexus One. And it’s not the screen on the Nexus One that annoys me (but that’s a story for another day).

The 3rd generation iPad is similar – only when compared to an iPad 2 up close can I really notice the difference, but ohh boy – what a difference it is. The size, shape and weight is almost identical to the iPad 2. The rear camera is apparently better, but personally that’s not a big selling point. Faster processor (quad core graphics?) and increased RAM are two big factors for me because original iPad I have is almost unusably slow with iOS 5 on it. LTE? Well, not until there’s some serious LTE push outside North America will I take notice of it.

Bottom line? If it’s the first tablet one is buying, then this is the best tablet on the market. If one already has an iPad 2, then don’t buy it unless one has $800 burning a hole in one’s pocket. What about me? I have an iPad 1. I’m sorely tempted, but I think I could last another year. Hopefully by then there’ll be a reason to get it for LTE in Europe.

DRM, Apple & iTunes, etc.

After my previous post I was struck by something so obvious, I kicked myself for not realising it earlier. The reason iTunes is so popular is that is can run on a Windows OS. The key is the device – the iPod – it works on Windows and Mac. The simplicity of it, along with the simplicity of using iTunes to purchase music (and now video) is what made it this popular. If Apple had wedded it to the Apple hardware/OS then it is unlikely that it would have reached the immense popularity that it has now. Apple is still paying for its mistakes with the P.C. market. It was the first manufacturer out there, but because of its closed architecture and refusal to license its OS to other hardware manufacturers, it lost the market to Microsoft. Microsoft was helped in its victory over Apple in the 1980s by Intel, IBM, Dell, Compaq, HP, Toshiba, etc. Intel chips were sold to P.C manufactures who could then license the Windows OS to put on there. This is despite Apple obviously having the superior OS. This story is known to everyone, so I will not dwell on it.

Apple, with its refusal to open iTunes in France has gone down the same path as it did earlier. Its closed architecture and tightly tied system for iTunes & iPod is reminiscent of what happened with its Macintosh hardware and OS. The only question now is who will be the company to dethrone Apple once again. Microsoft seems to have the right idea with PlayForSure. But who will partner it this time? The mobile phone manufacturers (Samsung, Nokia, Sony-Ericson, Palm, and Motorola) are on the front lines. Samsung also has deep roots in manufacturing flash memory that will give it an edge in this. Sony has its Walkman phone that seems to be doing well in this area with 4 GB and 8 GB models. Mobile carriers might also play a lead in this. The recent iTunes phone (ROKR) that Apple created with Motorola was a failure of huge proportions. Creative and other media-player manufacturers will also be important in this. Microsoft will license its OS once again and win out against Apple just like what happened before. Apple will surely retaliate. There is no way Steve Jobs is going to allows this to slip out of his fingers a second time. An iTunes phone is on the cards in the next few years. The other company that I predict might play a role in this is Google.

My last post was mostly about DRM and its issues. I have a little more to say on that. I recently read a report – I forget where – that Universal is going to digitize about 100,000 songs from its collection. This is music from the 50s, 60s, 70s and 80s that thus far do not exist with any legitimate DRM. What this tells me is that digital music has moved from being in the realm of early adopters to a place where it is accepted by mainstream customers. Those without much technical know-how (read as: those with who are interested in music from the 50s and 60s) are now willing to use digital stores like iTunes as their primary source of music. Now with DRM limiting the portability and transferability of music, I bet it is something that these people are not willing to put up with. With digital music reaching a critical mass among customers, it is even more of a reason to rethink the way DRM is implemented.

SONY-BMG caused a furor with the way it tried to limit customer rights with its implementation of rootkits on their CDs. This rootkit tried to cloak the DRM on the CD, but it also left backdoors open for those with malicious intent. This leads to privacy and security issues. Something tied closely to this is the use of P2P networks for obtaining free music. Although there has been a massive war against this, it is unlikely to ever vanish. Like prostitution (that is outlawed in almost every state and country), there will always be someone who will want to obtain music for free and will find a way of doing it. But older/obscure music will not be available this way. And P2P networks also face security and privacy issues. But the market has shown a willingness to purchase individual tracks at the right price. What is still lacking for me is the correct environment.

Pricing is another issue – the media is adrift with reports that the record labels are putting pressure on Apply to increase the price of a single of iTunes. Apparently, they already make about 40 cents per song (far more than what they recuperate from a CD sale). But commerce on the internet is still being sorted out. iTunes is not available in India as of yet. And when it is, the pricing and the currency will be different. If the cost of a single is far lower in Asia due to market economics, what stops a person from using a proxy and purchasing a song at a lower price from a different country? What about unreleased materials? TV shows and movies are now the new digital item to download legitimately. However, an episode of Lost may have been released for audience in the US, but could still be a few months behind in another country. Cyberspace is a global economy and this issue will have to be looked at soon. 2006 and 2007 will be very interesting years for digital media. Some of the wars will be dirty; others will be watched with keen interest. Personally, I can not wait for it to be done with so I can get on with consuming music that I enjoy without any hassles.