Why Apple is so interested in Beats: It’s not about the headphones

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Apple is reportedly buying Beats Electronics for $3.2 billion -- a whopping sum for a brand that, although popular, tends to be scoffed at by audiophiles.

So everyone wants to know: Why is Apple buying Beats when it could be investing in practically any other company?

One answer floating around is that Beats gives Apple valuable street cred among the cool kids. While Beats is undeniably cool, this theory seems hard to swallow. It's not like Apple is uncool. More compelling is the idea that Apple wants to get its hands on Beats's technology.

Some see the potential acquisition as play for Beats Music, Beats Electronics’ streaming music service. More broadly, Apple faces a long-term challenge. People turn to Apple for hardware -- iPhones, iPads, and the like -- but the future is all in online services.

Ninety percent of Americans have a cellphone these days, and more than 60 percent own a smartphone. Sales of mobile devices are flagging. Wearable technology is still being refined. Apple needs to find a winning formula in the cloud. And soon.


Why Apple is so interested in Beats: It’s not about the headphones