The Beats Exercise

Beats sold to Apple for 3.2 Billion. Why?

This was a mysterious acquisition when it happened. Not too difficult to make a new kind of headset, but that was what everyone saw when they purchased it.

Why did Apple buy Beats?


Apple's Beats Acquisition has already paid off

Indeed, Apple Music would launch in June 2015, and amass 10 million subscribers by January 2016 -- 20 million paid users that December. Less than two years later, and after some redesigns, it would double its tally to 40 million. Sure, the company hasn't caught Spotify globally, and it may never be able to. But in the US, Apple reportedly has more paying users than its biggest rival.

The reason for the price wasn't obvious --- but it was there.

It was not for the hardware, but for the number of subscriptions it could sell.

So, you need to ask yourself, how many paying subscriptions could MicroVision's technology enable?

Microsoft office is a subscription.

In the world of AR there will likely be subscription services for education, games, business applications, or additional fees just to have AR service.

Interactive projection(or display only) could improve the appeal media subscriptions significantly.

Can they sell in a few years 20 million subscriptions? There's your 3.8 Billion. ($27/share)


Secret History of Beats

“By 2013, Beats Electronics was a distressed business by any standard,” said the late PrivCo chief Sam Hamadeh. “The company was in a corner until Carlyle stepped in.” 

The Carlyle investment also gave Beats the funds it needed to keep expanding. That was especially important given the focus on its new streaming service. Beats Music celebrated its official launch in January 2014 with a concert at the Belasco Theater in Los Angeles, fronted by Dre, Diddy, Eminem, Nas, and Ice Cube. Inside, superstars from Drake to Pink mingled with label chiefs and talent agency executives at the oversubscribed show.

There were no reports of Apple executives in the crowd, but the computer giant was clearly watching. On May 8, the Financial Times reported that Apple had agreed to purchase Beats for $3.2 billion; that night, the grainy YouTube video of Dr. Dre’s impromptu celebration lit up the Internet.

******three weeks later, though, the deal went through—for a final price of $3 billion. “No traditional valuation measure applied to Beats as a business justifies the price,”

It seems pretty clear to me that it was purchased for getting subscriptions to increase. If it already paid off for the increase from doubling the number of paid users from 20 million to 40 million --- you have to ask yourself can the results from MicroVision's Near Eye Display OR their Interactive Display result in 20 million paid subscriptions? (I believe the answer is clearly yes it can -- significantly more than that.) so those 20 million paid subscribers are worth