After rewading this textbook:

if beats electronics core competencies are indeed intangibles, such as coolness & marketing savy, do you think these competencies will remain as valuable under apple's ownership? why ir why not?

Dr. Dre's Core Competency: Coolness Factor a Why then would Apple puy 53 billion to quite Brats Electronics? This was by far the largest acquisition in Apple's history. Two main reaso: First, Apple is hoping that some of Beats' coolness will spill over to its brand, which has become IN 2014, DR. DRE whose real name is Andre Young- somewhat stake. Apple's iPhones, for example, have become was celebrated as the first hip-hop billionaire after Apple somewhat standardized commodity gives the cu acquired Beats Electronics for 53 billion. Dr. Dre has a imitation by Samsung and others, although Apple has high long track record as a su expectations for its 10th anniversary iPhone, released in the cessful music producer, fall of 2017. Second rapper and entrepreneur 6 although Apple is the Known for his strong becht world's largest music work ethic. he expects vendor with NO mil- nothing less than perfec lion accounts on iTunes tion from the people he Store, the industry is works with similar to being disrupted. Con some of the personal tent delivery, especially in music but also video ity attributes ascribed think Netflix), is mov- to the late Steve Jobs, ing rapidly from ow co-founder and longtime ership via downloads to CEO of Apple. streaming on demand. Although Dr. Dre cre- As consequence ated and subsequently sold music downloads have several successful music Dr Dre left and Jimmy lovine are cofounders of Beats Following Apple's been declining in the record labels, as an entre- acquisition of Beats Dre and lovine continue to work together to keep Beats past few years preneur he is best known as relevant and tied to current artists Kevin Mazur Wirelmag/Getty Images co-founder of Beats Elec- tronics with Jimmy lovine, also an entrepreneur and record BEATS' COOLNESS FACTOR and film producer. Both are considered to be some of the best- Beats by Dr. Dre achieved an unprecedented coolness fac- connected businesspeople in the music industry, with personal tor with celebrity endorsements not only from music icons networks spanning hundreds of both famous and up-and- but also athletes, actors, and other stars. Before Beats, no coming artists. Founded in 2008. Beats Electronics is known musician endorsed audio headphones in the same way as a globally for its premium consumer headphones. Beats by basketball player such as Michael Jordan endorsed his line of Nike shoes, Air Jordan. Dr. Dre was the first legend- Dr. Dre, which he claims allows the listeners to hear all the music." Since early 2014, the company also offers the stream- ary music producer to endorse premium headphones. In addition, he created custom Beats for stars such as Justin ing music subscription service Beats Music. Beats' vision is to bring the energy, emotion, and excitement of playback in the Bieber, Lady Gaga, and Nicki Minaj. Other music celebri ties including Skrillex, Lil Wayne, and william endorsed recording studio to the listening experience and introduce an Beats by wearing them in their music videos and at live entirely new generation to the possibilities of premium sound events and mentioning them on social media. Bat Bcats did entertainment. Many acoustics experts maintain, however, not stop at musicians. Famous athletes basketball super- that playback of digitally compressed MP3 audio files is infe- stars LeBron James and Kobe Bryant, tennis player Serena rior in comparison to high fidelity. Moreover, the sound qual- Williams, and soccer stars Cristiano Ronaldo and Neymar ity of Beats headphones is considered poor in comparison to Jr-wear Beats by Dr. Dre in public and endorse the brand other premium-brand headphones such as those by Bose, JBL. in advertisements Sennheiser, and others. a DISRUPTION IN CONTENT DELIVERY Content delivery is rapidly moving from ownership through downloads to renting via online streaming. This disruption in the business model is most visible in movies, as the suc- cess of Netflix demonstrates, but is also gaining steam in music. Apple is a laggard in music streaming when compared to leaders such as Pandora with 250 million users and Spo- tify with 100 million users (of whom 50 million are paying customers). Apple's initial attempt at online music stream- ing service, iTunes Radio created in 2013, has been falling flat. After disrupting the music download space with iTunes in 2003, Apple is now being disrupted by others that lead in music streaming. Apple is hoping that by acquiring Beats Music it can become a leader in the music streaming space Renamed Apple Music, the service now has 20 million paid subscribers. Yet it faces competition in the coolness space"? with the music streaming service Tidal, founded by rap mogul Jay Z. Tidal has exclusive release contracts with superstar artists such as Kanye West, Rihanna, and Beyonc (who is married to Jay Z). Tidal, however, only has some 2 million paid subscribers. The network provider Sprint, nonetheless, acquired one-third of Tidal in 2017. You will learn more about Beats Electronics by reading this chapter, related questions appear in "ChapterCase 41 Consider This