Entertainment / Organizational Strategy / Technology

Apple Aims to Climb Up the Ladder – Again!

Beats-Apple

Christina Schmitz

As a top player in the field of technology, Apple has shown the world innovative, easy to use, and sleek products. After the death of Steve Jobs, co-founder of Apple, the company struggled to provide a breakthrough product to place on its shelves. “The company’s earnings have been shrinking along with its share of the smartphone and tablet computer market that Apple reshaped with the 2007 release of the iPhone and the introduction of the iPad in 2010” (Liedtke). Apple has provided new software and newer models of their existing products, but hasn’t been able to provide Apple users with an original product.

With competition rising in the tablet and smartphone markets, many Apple users are shifting over to products such as the Samsung Galaxy smartphone and the Amazon Fire tablet. Apple is struggling to keep up with the quickly advancing competition and is seeing a decrease in profit and reputation due to their diminishing ability to innovate.

In an effort to drive up sales and retain customers in the midst of this fierce competition, Apple has invested $2.6 million and $400 million in equity to acquire Beats music, a subscription music streaming business, and Beats Electronics, which makes upscale speakers, headphones, and audio software (Karp). Tim Cook, Apple’s CEO comments, “Music is such an important part of all of our lives and holds a special place within our hearts at Apple. That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”

Beats Electronics is, no doubt, a well-known and competitive brand in the music industry. This acquisition may have been the right step for Apple to increase sales and provide a stand out feature to its products and services, but it also pushes Apple into unfamiliar territory. Apple has been a successful stand-alone brand, and now with the addition of Beats, another successful brand, it needs to carefully balance the branding of its products.

Although Apple has taken what looks like a step up the ladder in such a fast-paced and competitive industry, will it be able to balance two popular brands, or will Apple rely too heavily on Beats and lose the competitive edge, innovation and drive for new and original technology that it seems to have already misplaced? Or, will Apple surprise us with a new and exciting plan that establishes a brand new category and develops a dream leadership team, drawing consumers back into the Apple craze? With such a high price tag on this acquisition it will be interesting to track the development of these two brands and find out whether Apples effort to climb back up the ladder will bring them above their competitors.

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Sources

“Apple to Acquire Beats Music & Beats Electronics.” Apple – Press Info – Apple to Acquire Beats Music & Beats Electronics. N.p., n.d. Web. 01 June 2014. <https://www.apple.com/pr/library/2014/05/28Apple-to-Acquire-Beats-Music-Beats-Electronics.html&gt;.

Karp, Hannah, and Alistair Barr. “Apple Agrees to Buy Beats.” The Wall Street Journal. Dow Jones & Company, 28 May 2014. Web. 01 June 2014. <http://online.wsj.com/articles/apple-to-buy-beats-1401308971&gt;.

Liedtke, Michael. “Apple’s Earnings Fall despite Rising IPhone Sales – NBC News.” NBC News. N.p., 2 June 2014. Web. 03 June 2014. <http://www.nbcnews.com/business/business-news/apples-earnings-fall-despite-rising-iphone-sales-f8C11484098&gt;.

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