Early reaction to Apple's $3.2-billion bid for Beats: Huh?

Less than a day after news broke that Apple was in talks to acquire Beats Electronics for $3.2 billion, many observers were still scratching their heads.

Yes, Beats makes some popular headphones. Yes, it's launched a streaming music service, though one that appears to be off to a slow start. And yes, Beats has some serious brand buzz thanks to co-founder Jimmy Iovine and Dr. Dre.

That said, it was hard to find someone who thought the deal for Apple, at that price, made much sense. In a note to clients, Gene Munster, a Piper Jaffray analysts who is generally bullish on Apple, said the company would be better off spending its considerable war chest on something else.

"We are struggling to see the rationale behind this move," Munster wrote. "Beats would of course bring a world class brand in music to Apple, but Apple already has a world class brand and has never acquired a brand for a brand's sake." Given Apple's challenges in areas like Web services, Munster said he'd rather see that kind of money put toward buying a stronger Internet service.


Early reaction to Apple's $3.2-billion bid for Beats: Huh?