Why does Apple want to buy Beats Electronics, the headphone company owned by Dr. Dre and Jimmy Iovine, for $3.2B? One word: Millennials (those born between 1980 and 2000).
Anyone who thinks Apple is about products and product features doesn’t get it. Apple’s brand is cool lifestyle. Period. Well, it used to be that.
At the gym and in the malls, I see Millennials wearing Beats headphones — not the superior Bose headphones. Bose headphones are for the 1% crowd, even though they also carry a $300 pricetag. Apple wants to steal the Millennial lifestyle addicts from Samsung.
New King of Cool?
According to Forbes, Samsung is the king of smartphones, outselling Apple almost 2:1, even though Apple’s corporate value is triple that of Samsung. But, king of cool, too?
When Ellen DeGeneres orchestrated that famous selfie while hosting the 2014 Oscars, the most-retweeted photo in the history of self-absorption, Samsung emerged as a cool player.
Apple is accustomed to inventing and owning cool, and arrogantly believed it always would retain that mantle. Proof: Tim Cook, Apple’s CEO, told investors to dump Apple stock if they don’t believe in global warming. Seriously? What a branding blunder.
Becoming Synonymous with Hip-Hop
So, how to regain the cool factor, Apple? Larger screen? Better resolution? More, cheaper models? Not enough. A vendor can’t be unique or stay unique by copying its competitors.
How about this: become synonymous with hip-hop. Then, the image-conscious Millennials — one-third of whom are unemployed and living with their parents — will save your hide. Well, they still could buy the Apple-owned Beats headphones for their Samsung Galaxys. Worse, they may become indifferent to or reject a post-Dre Beats.
And, what about Baby Boomers who buy iPhones and don’t want to become synonymous with hip-hop? Will they migrate to Samsung? Time will tell.
Final branding advice to Tim Cook: Don’t completely blow this $3.2B purchase by renaming the headphones iBeats! Apple does not own lower-case i — it’s now generic.
Based on Samsung’s smartphone lead, product-shipment trajectory, clever branding, and lack of arrogance, it’s now hard to imagine a future when Apple beats Samsung.
POSTSCRIPT #1: Apple Buys Beats for $3B to Be Cool Again (05.28.14)
POSTSCRIPT #2: Bose Sues Beats for Patent Infringement (07.25.14)
POSTSCRIPT #3: Colin Kaepernick Fined $10K For Wearing Beats Headphones (10.09.14)
© 2014 Marc H. Rudov. All Rights Reserved.
About the Author
Marc Rudov is a branding advisor to CEOs,
producer of MarcRudovTV, and author of four books