Anyone above the age of twenty will remember the glory days of Beats by Dre headphones. As little as seven years ago, the iconic headphones were everywhere. Every street, every corner, every café. You couldn’t leave the house without seeing a pair.
Even for people who couldn’t afford them, just the promise of fake Beats headphones was a tantalizing prospect. So what happened? In ten years, Beats went from the most recognizable brand on the market to a subsidiary of Apple who silently pops out a new product now and again.
What exactly happened, and what is Apple doing with Beats?
A Brief History
Beats had an incredible start. As we all know, the face of the company is legendary Hip-Hop artist Dr. Dre. Back in 2006, he teamed up with Interscope Records Owner Jimmy Iovine to plug what they saw as a massive gap in the market.
At the time, MP3 players were all the rage. And companies like Apple were selling $400 iPods that came with a $1 pair of earbuds which sounded dreadful. Dre and Iovine thought this was a bit of an insult to musicians. So they founded Beats by Dre to do something about it and hopefully make some money along the way.
The rest, as they say, is history…
Through incredibly smart marketing, involving the use of all their celebrity contacts, they turned the company into an overnight sensation, despite the fact they were never the best quality headphones and were extremely expensive.
The exaggerated bass tuning and cool factor of their products were more than enough to see Beats headphones fly off the shelf. Within a few short years, Beats had gained a giant 70% share of the premium headphone market. An incredible achievement.
They also branched out successfully into music streaming with the introduction of Beats Music in 2012.
The Beginning of the End?
Fast forward to 2014. And the announcement that one of the world’s largest tech companies, Apple, was going to purchase the Beats brand for a jaw-dropping $3.2 billion. What could go wrong from there?
It seemed like a strange deal at the time. Why would Apple be willing to spend such an exorbitant sum on a brand of fashion-first headphones? Especially ones that were not respected by anyone who cared about sound?
They took a lot of criticism…
Ask yourself a question. Which company is currently the biggest seller of true wireless headphones, the biggest growth sector in the headphones market? You guessed it. Apple. In 2019 alone, they sold a staggering 60 million AirPods alone, accounting for 71% of the total revenue generated in that sector.
In 2014, Apple knew full well that the wireless earphones market was about to explode. With the runaway success of their iPhone range and smartphones in general, they realized how important a good pair of wireless earphones was going to be.
Naturally, they didn’t want everyone to be using Beats headphones. They wanted them to use an Apple product instead.
Apple Takes Over
You can probably see where this is going. It’s safe to assume now that when Apple bought Beats, they had no real intention of collaborating with them or using the Beats brand at all. So, what is Apple doing with Beats?
From the start, they set about dissecting the company and using all of their resources to promote Apple products above Beats. Out came the incredibly successful AirPods, the wireless HomePod, and more recently, the AirPods Pro. Along with the upcoming AirPods Max.
Beats didn’t disappear…
The geniuses at Apple didn’t stop making Beats headphones. Head over to any Apple Store, and you’ll find a limited range of Beats headphones, all of which have been equipped with their latest H1 chipset. Therefore, Beats work well with Apple devices.
And why not? The Beats brand still has significant value, so Apple might as well continue to extract profit from it. But, you can’t help but notice that while they haven’t completely killed it, they are slowly letting the brand die. Apple is investing very little in Beats’ long-term future.
There are some new Beats products…
However, you’ll notice that they’ve only upgraded models that don’t compete with Apple products. For example, Apple has not refreshed the Beats Pro because they knew full well that they were coming out with their over-ear model, the Airpods Max.
When it comes to speakers, Apple practically left the Beats Pill range to rot. They scrapped the smart speaker that Beats was working on to leave as little competition as possible for their HomePod range.
Two main products they kept and developed are the sports-focused Powerbeats range and the more fashion-focused Beats Studio range. This is probably because Apple doesn’t have a direct replacement for those models. But you can be sure that when they do, Beats will be walking the plank.
So you’ve heard of Apple Music, right? It’s the companies big-budget, monthly subscription, music streaming service. Well, you can guess where the foundations of that came from. That’s right, Beats Music.
The growing radio-style streaming service, Beats Music, was rebranded as Apple Music. This was a bid to compete with the millions of users spending their money with the likes of Spotify.
It took Apple a long time to come round to the concept that streaming was going to be profitable. More much so than trying to sell individual tracks through iTunes. But once they saw the runaway success of Spotify, it was time to make the transition.
Late to the game…
Spotify was so far ahead of the competition in terms of subscribers; it looked like an impossible task to catch up. So, apple used Beats’ successful model and emulated several successful Spotify features. As a result, they became the second-largest music streaming service in the world and a genuine contender to Spotify’s throne.
As of 2020, Apple Music now has 72 million paying monthly subscribers. A figure which they’ve managed to increase from 6.5 million in late 2015.
Looking for some superb Beats or Apple Products?
Then take a look at our in-depth Beats Solo3 Wireless Review, our Beats EP Review, our Beats Studio3 Wireless Review, our BeatsX Review, our Beats Solo Pro Review, our Beats Solo 2 WIRED Review, our Powerbeats3 Wireless In-Ear Headphone Review, and our Apple Beats Powerbeats Pro Review for awesome items you can buy in 2021.
And don’t miss our detailed guides on Apple AirPods vs Powerbeats Pro, AirPods Pro vs Beats Powerbeats Pro, 3 Simple Tips to Keep Airpods From Falling Out, and How to clean your AirPods Pro for loads more helpful information.
What is Apple doing with Beats – Final Thoughts
In the final analysis, it appears Apple only wanted to acquire the Beats brand to eliminate a potential rival. Not only in the headphone and speaker department but also to gain a foothold in the insanely lucrative and rapidly expanding music streaming market.
It could be argued that the Beats headphone range was going to die anyway. A more well-informed consumer base demanded products that were not only marketed well but could also deliver high technical performance.
The profits that Apple is now realizing from the music streaming side of the Beats acquisition make the $3.2 billion price tag seem cheap. In 2020 alone, Apple Music brought in revenues of $4.1 billion, and this is only likely to spiral upwards.
So we hope that answers what Apple is doing with Beats. Swallowing it whole. They had their peak, and it seems remarkably unlikely that they will ever return to those lofty heights. R.I.P Beats. It was fun while it lasted.
Until next time, long live the music.