Apple bid for Beats by Dre is taking on a twist in the music and electronics world as analysts have a mixed reaction to the deal. According to reports, Apple is likely to buy Beats for $3.2 billion. This translates to $29,000 per customer, since Beats has very few customers.
Looking at Beats Music accounts, it had 49,371 individual accounts and 61,621 "family" accounts in March, for a total of almost 111, 000 subscribers, which is paltry amount compared to the no.1 music site, Spotify, which has 25 million accounts with 6 million paid users.
Beats Electronics, has a well-known brand in headphones and in January the company launched Beats Music .
A leaked royalty report from The Trichordist said that Beats pays a rate of $0.000126 per play, according to the report, whileSpotify pays somewhere between $0.006 and $0.0084. Although individual accounts for Beats Music runs for $9.99 per month, and family accounts cost $14.99. When you factor in AT&T's promotion offering of a free trial running for 90 days, a clear cut figure for actual paying users it's unclear how many users have actual paying accounts.
Conflict reports suggest that a deal between Apple and Beats would be closed by this week, but others say that Apple is scrutinizing the acquisition before taking a plunge into a heavy investing.
Another report by Forbes said, "They (Apple) just bought Beats, a consumer electronics and music company which has never made a "Best in Class" product in any category. It makes OK products, but its marquee product was designed, manufactured, and initially distributed by Monster, one of the worst consumer electronics companies there's ever been.
The report continues to say, "Beats is a fashion company, a triumph of product placement marketing and blowing out the luxury hip hop market more successfully than any company since Nike - but that's not the same thing as making good products, and it's not clear why Apple doesn't know (or maybe care) about that critical difference."
