Apple called "arrogant" in report detailing purchase of Beats Audio

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Why would Apple be forced to pay $3 billion for Beats Audio? According to a report issued Thursday, Apple's arrogance got the better of it as iTunes Radio management ignored the competition to such a degree, that some inside the division did not know that Spotify was a subscription service. But Apple engineers knew all about Spotify, preferring to use it instead of their own iTunes Radio during their free time. Another streaming service favored by Apple engineers on their own personal time was Pandora.

Apple had figured that with iTunes Radio, it could use a consumer's buying history on iTunes, to determine which songs they would want to listen to on iTunes Radio. But this led to jumbled playlists with songs that didn't fit together. An iTunes Radio listener who selected a particular style of music, might hear the same song twice, or have rock tunes mixed in with show tunes and country numbers.

One former Apple employee says that Apple has lost touch with the younger generation. "The Apple coolness is kind of fading away," he says. Still, iTunes Radio has over 40 million listeners according to Senior VP Eddy Cue. But iTunes is supported by ads, and is free to the consumer. Beats Music has 250,000 paying subscribers after four months. Spotify, on the other hand, has 40 million listeners with 10 million paying subscribers.


With the purchase of Beats, Apple picks up people who are more knowledgeable about the music industry and how streaming works. Apple thought it had a "Spotify killer" with iTunes Radio, because it didn't really understand the business. For example, Apple figured Pandora was not a threat due to its lack of revenue. With Dr. Dre and Jimmy Iovine on board, Apple might believe that it has purchased some of its lost cool, while at the same time it has the people it needs to become a success in streaming music.

source: BuzzFeed via AppleInsider

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32 Comments

1. PBXtech

Posts: 1032; Member since: Oct 21, 2013

Steve Jobs didn't think Android was a threat when he first saw it either.

9. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Even with Dr. Dre and Jimmy Iovine 'on board', it remains to be seen whether Apple actually listens to them. The 'tone deaf' comment was telling. In another time long ago, GM purchased EDS to get Ross Perot on board to breathe an innovative spirit into GM. What failure that exercise was. Apple needs to lose some of its arrogance if it wants to have a market leader position in streaming digital radio. Iovine and Dre can contribute, but only if they get the support from Apple senior management. Whether they really have the support or not is the $3 billion question.

31. Topcat488

Posts: 1415; Member since: Sep 29, 2012

Beats Headphones aren't worth more than the LA Clippers basketball Team. And for sure won't generate more income than the Clippers either. O.o

20. techperson211

Posts: 1280; Member since: Feb 27, 2014

Being arrogant took a hit on apple. Even the engineer do not listened to iTunes . Maybe they're not using iPhone as well ? Just saying.

2. tettech

Posts: 69; Member since: Dec 18, 2013

When a company looses its grooves and other kick-starter companies are gaining steam, its time to refine the business strategies.

13. Augustine

Posts: 1043; Member since: Sep 28, 2013

Or rather, as history demonstrated at the rise of Apple, Intel and Microsoft, the companies of the previous era cannot adapt, whether due to lack of vision or plenty of hubris or both, and dwindle out of existence.

3. wilsong17 unregistered

lol i guess is time google buy spotify and combine it with google music and rock apple word

10. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

That would cause the boys at Apple to have to change their underwear.

4. fzacek

Posts: 2486; Member since: Jan 26, 2014

No duh "the Apple coolness is fading away!" Like 9 out of 10 teenagers have iPhones, so you're actually the cool guy on the block if you have an Android phone...

7. wilsong17 unregistered

lol only high school teen trying to impress girls with over price phone and usually are poor one showing off

21. Ashoaib

Posts: 3276; Member since: Nov 15, 2013

Rightly said... my subordinates cant afford to buy an iphone because it is equal to their one month salary but still I noticed most of them have latest iphone... while on the other hand I or my peers can easily offord to buy any latest iteration of iphone but I deem it wastage of money to purchase such an under specs phone... this is very strange that those who should have difficulty buying iphone are buying it...

5. tedkord

Posts: 17311; Member since: Jun 17, 2009

Apple arrogant? No way!

6. corporateJP

Posts: 2458; Member since: Nov 28, 2009

Apple's $3B gamble... Grab the popcorn and watch now as Google goes after Spotify and MS shoots for either Slacker or Pandora...

8. wilsong17 unregistered

that is what im thinking with 40 million user using google server maximum speed

16. engineer-1701d unregistered

Slacker is with samsung milk music, they would have to do pandora

11. MrNobodyWTB

Posts: 27; Member since: Jan 03, 2012

Beats audio is horrible, anyone who appreciates listening to music how it was meant to be heard stays away. I will never buy a product with beats attached to it.. I actually was planning on eventually picking up a 2nd phone for the sake of having an iPhone, that's not happening now, and I'm not really unhappy about that.

12. wilsong17 unregistered

bro is iphone 6 with built beats audio for 800 is a nice deal

14. fzacek

Posts: 2486; Member since: Jan 26, 2014

$800 for 16GB iPhone 6 sounds about right...

17. tedkord

Posts: 17311; Member since: Jun 17, 2009

Beats is horrible, but Apple could improve them.

25. OnlyOneGio

Posts: 13; Member since: Apr 17, 2014

You dont have to buy. there are alot of others who will and apple wont go broke because of you wont be buying. Just look for a better reason for not buying cause eather way you look at it, "beats" is an improvement.

15. skyline88

Posts: 697; Member since: Jul 15, 2013

typical for majority of American big companies and corporations: 1) arrogant 2) hypocrite 3) high ego iJunk itself is already terrible enough standing hopelessly behind the mighty Android and Windows, and now they gonna match it with the dreadful Beats Audio. good luck Tim Cook, now your fruit is Cooked.

18. Emmanuelz

Posts: 222; Member since: Aug 01, 2013

Note 4 coming soon!

22. Ashoaib

Posts: 3276; Member since: Nov 15, 2013

Note 4 is coming but what it will do??? nothing! Samsung doesnt pay much focus on music in their phones... just listen, their speaker sound is average, headphones sound is average not significantly better than other flagships

19. aaronix

Posts: 17; Member since: Jun 05, 2014

apple has started war by buying beats, we wait and see who will win this war.

23. techloverNYC

Posts: 601; Member since: Nov 20, 2012

$3Billion for apple is just loose changes in their pocket. Ppl are really over reacting. With they massive cash supply they can buy up any company they want if not for the federal regulations. Nobody is calling out amazon or facebook for buying stupid companies, why apple?

24. Sid91 unregistered

I believe Apple is losing the plot, this would have worked in 2008 but the way technology is evolving by the second unless apple becomes flexible to change they are going to go the same way as nokia,

26. medicci37

Posts: 1361; Member since: Nov 19, 2011

TIM & DRE Awww looks like love

27. darkkjedii

Posts: 30966; Member since: Feb 05, 2011

It's theirs now, so oh well.

28. SIGPRO

Posts: 2815; Member since: Oct 03, 2012

Apple+Beats..............they think it's a win win situation, but eventually it will bite them in the ass. Beat is not that good and iphones are overpriced, so it will fail!

29. darkkjedii

Posts: 30966; Member since: Feb 05, 2011

So you hope.

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