Will Apple Continue Dr. Dre‘s Legacy

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Will Apple Continue Dr. Dre‘s Legacy

Apple Inc. (AAPL) announced stellar opening week sales for the iPhone 6 and iPhone 6 plus just yesterday. The company sold more than 10 million units over the first weekend since the smartphones’ availability. To the surprise of many, the new iPhones did not pack the Beats Audio music-streaming application called “Beats Music,” leading to speculation on Apple’s strategy with regard to its recent acquisition.

Apple acquired Beats Audio for $3 billion, its biggest takeover till date. Beats provides online music-streaming services and also makes music accessories such as headphones.On Monday, Tech Crunch cited as many as five inside sources, which revealed that the company intends to discontinue the Beats Music services and the brand. However, the timeline of the move was not shared. But later in the day, Recode reported a statement from Apple’s PR representative, Tom Neumayr, who refuted the previous speculation saying it is “not true.” No further comments were made by him.

This comes on the back of mixed signals from Apple about the future of Beats. Apple did not leverage the Beats Audio brand for its smartphones. On the other hand, the company recently added Beats channel to the Apple TV, a move that indicates that it may continue the Beats brand name.

Below, we draw an argument for and against the continuation of the Beats Audio brand.

To Keep

The music download market has been shrinking at a fast pace for some time now, with users increasingly moving toward music subscription. Last year, sales of digital music went down 13.3%, while music streaming increased 32% in the US.

The integration of Beats Music into iTunes will give Apple a product that has been developed by industry giants, Dr. Dre and Jimmy Lovine. Even Tim Cook, the CEO of Apple, is “100 percent sold, on music subscription,” which he revealed in an interview with Charlie Rose.

 

 

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