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Experts search for method to Apple's Beat madness

Gregg Keizer | May 12, 2014
Analysts today struggled to explain why Apple might acquire Beats Electronics, the headphone maker and music subscription service operator, for $3.2 billion.

"Given that core hardware growth is slowing too, creating greater leverage around the hardware revenue base — by increasing sales of related items such as content and accessories — is a smart way to keep revenue growth going, at least until a new hardware category emerges," Dawson wrote, referring to pressure from Wall Street for Apple to come up with another big hit.

"The strategic rationale behind this would be to expand accessories and getting music going again," said Dawson in today's interview. "Beats Music's curation and recommendation technology could help iTunes in general — iTunes Radio specifically — but discovery is a huge trend. Content of any kind must have effective curation, discovery and recommendation."

 

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