Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Did Apple Stock Get Its Groove Back?

Companies / Apple Jun 04, 2014 - 05:11 PM GMT

By: Investment_U

Companies

Tom Sandford writes: It’s official: Google (Nasdaq: GOOG) has surpassed Apple (Nasdaq: AAPL) as the most valuable brand in 2014.

And that’s got Apple fanboys and execs squirming in similar fashion.

Perhaps Apple executives could smell the smoke of incendiary public perception long before they saw the flames. Even before the study came out, the rumor mill was awash with talk of Apple making purchases to blast the company coolness factor into overdrive.


So what product could possibly fill such need for a company and its stakeholders ? Well, Apple called for innovation, and Dr. Dre answered.

Beating the Heat

On May 29, Apple snapped up Beats Electronics LLC, the headphone and audio mastery empire Dre co-created with industry aficionado Jimmy Iovine, for a cool $3 billion.

It’s hard to argue the colorful, ostentatious earphones that sell for $300 a pop aren’t still one of the coolest ways to blow your dough, especially with a constant onslaught of celebrity endorsements (e.g. atop LeBron James’s noggin courtside at the 2008 Beijing Olympics or around Lady Gaga’s alabaster neck).

But was it a wise move, or will the purchase take a bigger bite out of Apple’s core with no guaranteed payoff? Iovine seems to think the former, in a quote released with the acquisition announcement.

“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”

But the company has been matched - by Google and other successful tech upstarts - which leaves current and future investors with a hanging question: Can Apple get its groove back?

Capitalizing on Cool

Aside from upping Apple’s Fonzie factor, there is actually a much more tangible reason for Apple’s investment. Though Beats is known primarily for headphones, it also maintains a music streaming service with as many as 250,000 subscribers and 20 million tracks, which was designed to contend with Pandora Media Inc. (Nasdaq: P), Spotify (which is rumored to be planning an $8 billion IPO), and Apple’s iTunes Radio (until recently, that is).

Although the announcement of a possible marriage of between Beats and iTunes subscribers has had a ripple effect on the Internet radio domain, is it really worrying the big boys?

For execs with one of the biggest Internet radio pioneers, Pandora, the answer is no - they don’t expect it to rock the boat on their fairly steady traffic of 8.91% of total radio listeners.

“We did see a slight drop in users from that and since have recovered and continued to grow,” he said, of iTunes Radio at a recent investment conference.

In fact, he doesn’t think Beats, iTunes Radio or Spotify are direct competitors, meaning an iTunes-Beats alliance wouldn’t be much of a worry.

“The connected radio, the lean-back experience, the free, ad-supported part of music listening, that’s Pandora’s domain,” he said. “And we still have a dominant market share and by far the best product.”

The True Cost of Cool

Apple investors should have nothing to fear - to assure a continuing source of cool, Beats’ founders were also part of the package deal, and will become the newest executives added to Apple’s roster. As far as costs to Apple, the venture’s not so risky for a company flush from so much cash on reserve.

Though $3 billion may sound like a significant amount, it may be peanuts to Apple - just 2% of the $150 billion Apple has amassed over the years, according to Forbes.

Pandora investors shouldn’t be surprised to see the stock drop or slow a few points as Apple’s alliance comes to fruition, but with Pandora’s soaring fourth quarter profits and revenue growth of 52%, it may just be a blip on the Internet radio radar.

With Beats, Apple has gained a new foothold in the struggle to stand on the razor’s edge of innovation, but some critics say it simply cuts into Apple’s reputation, according to Bob Lefsetz in Variety.

“We no longer live in an Apple world. Apple dominated music because of the seamless interface of the iPod and iTunes, with the iTunes Store the glue holding it all together,” he writes. “It no longer has a market monopoly. As that dominance erodes, you must come up with a new dominant product, one that hopefully ties all your others together.”

Perhaps Beats will be that acquisition for Apple, but that all depends on consumer response, Apple’s perceived innovation and what LeBron decides to wrap around his ears this season.

Source: http://www.investmentu.com/article/detail/37851/nasdaq-aapl-buys-beats

http://www.investmentu.com

Copyright © 1999 - 2014 by The Oxford Club, L.L.C All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Investment U, Attn: Member Services , 105 West Monument Street, Baltimore, MD 21201 Email: CustomerService@InvestmentU.com

Disclaimer: Investment U Disclaimer: Nothing published by Investment U should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investment advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Investment U should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Investment U Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules