Presentation on Beats Audio
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Beats Electronics was founded in 2006 by Dr. Dre and Jimmy Iovine to produce high-quality audio products. They initially partnered with Monster Cable to manufacture their first product, Beats by Dr. Dre Studio headphones. In 2010, HTC acquired a majority stake in Beats, and in 2014, Apple acquired Beats for $3 billion. Beats manufactures various headphones, speakers, and other audio accessories that are popular among musicians and celebrities. Their acquisition by Apple helped expand their product range and distribution.
Presentation on Beats Audio
- 3. Dr.Dre • Andre Romelle Young (born February 18, 1965), known by his stage name Dr. Dre, is an American record producer, rapper and entrepreneur. • He is the founder and current CEO of Aftermath Entertainment and Beats Electronics. • In 2014, Dr. Dre was ranked as the second richest figure in the American hip hop scene by Forbes with a net worth of $550 million; he is at the top of the 2015 Forbes list, with an estimated pre-tax take of $620 million in 2014.
- 4. JIMMY IOVINE • James "Jimmy" Iovine, born March 11, 1953) is an American entrepreneur, record producer, and film producer. • He is best known as the co-founder of Interscope Records and chairman of Interscope Geffen A&M. • In 2006, Iovine teamed with Dr. Dre to found Beats Electronics, a company which produces audio products and operates a music streaming service. • The company was purchased by Apple for $3 billion in May 2014.
- 5. MOTTO OF THE COMPANY
- 6. QUOTE BY THE FOUNDER
- 7. FORMATION • The company was formally established in 2006, a time when the impact of piracy on music sales and the substandard audio quality provided by Apple's plastic earbuds. • Beats initially partnered with Monster Cable, an audio and video component manufacturer based in Brisbane, California, to manufacture and develop the first Beats- branded products, and debuted its first product, Beats by Dr. Dre Studio headphones, in late 2008. • To promote its products, Beats primarily relied on endorsements by pop and hip-hop music performers (including product placement within music videos), and partnering with musicians and other celebrities to develop co-branded products.
- 8. PURCHASE BY HTC • In August 2010, mobile phone manufacturer HTC acquired a 50.1% majority share in Beats for US$309 million. • The purchase also granted HTC exclusive rights to manufacture smart phones with Beats-branded audio systems. • Despite its majority acquisition, HTC allowed Beats to operate as an autonomous company.
- 9. ACQUISITION BY APPLE • On May 28, 2014, Apple officially announced its intention to acquire Beats Electronics for US$3 billion—with $400 million to be paid in Apple stock and the remainder in cash. • Some reports suggested that the reduction in value may had been a result of lower-than-expected subscriber numbers for the Beats Music service. • Iovine felt that Beats had always "belonged" with Apple, as the company modeled itself after Apple's "unmatched ability to marry culture and technology."
- 10. BOSE LAWSUIT AGAINST BEATS •In July 2014, Bose Corporation sued Beats Electronics for patent infringement, alleging that its "Studio" line incorporated noise cancellation technology that violated five patents held by the company. •Bose has also sought an injunction which would ban the infringing products from being imported or sold in the United States. •The lawsuit was settled out of court.
- 11. MONSTER LAWSUIT AGAINST BEATS •In January 2015, Monster Inc. sued Beats for fraud, alleging that the company had used illicit tactics to force Monster out of the venture. •Monster argued that the acquisition of Beats by HTC and its founders' subsequent buyback was a "sham" to take control of Monster's stake in the company—which could have been valued at over $100 million in the Apple purchase. • Monster also alleged that Beats had partaken in anti-competitive practices with retailers to force those offering Beats products to not offer Monster's competing products.
- 12. DR. DRE'S BEATS ELECTRONICS GETS $500 MILLION INVESTMENT FROM CARLYLE GROUP • Beats Electronics, a maker of high-end headphones whose distinctive branding and ubiquity makes them hard to miss in many urban areas nowadays, has secured a $500 million investment from Washington-based private-equity firm the Carlyle Group. • Carlyle has purchased an undisclosed minority stake in Beats in a deal that values the electronics maker at more than $1 billion. The ballpark valuation comes as no surprise, given that Beats is on track to net anywhere from $1.2 to $1.5 billion in revenue this year.
- 22. BEATS BUYS OUT HTC • Taiwanese smartphone manufacturer HTC announced that it was selling back to Beats its remaining 25 percent stake in the audio equipment company for $265 million. Two years ago, HTC bought a majority stake in Beats for about $300 million and began integrating the company's audio technology into its smartphones. • Then, in July 2012, HTC sold half of its stake, about 25 percent, back to Beats for $150 million. Analysts said the partnership had failed to help HTC make gains in the smartphone market.
- 23. SWOT ANALYSIS OF BEATS ELECTRONICS STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Existing distribution and sales networks Competitive markets New acquisitions Growing competition and lower profitability Domestic markets Small business units New products and services Increasing rates of interest Monetary assistance provided Productivity Growing demand Rising cost of raw materials Increasing costs Technological problems External business risks
- 32. THANK YOU..