Even among tech analysts, who have become used to multi-billion-dollar price tags for tiny companies, the news that Apple may pay $3.2 billion for Beats Electronics, a headset maker and fledging streaming music service co-founded by rapper Dr Dre, provoked reactions bordering on outright ridicule.
“We are struggling to see the rationale behind this move,” wrote Piper Jaffray analyst Gene Munster. The deal will “justifiably generate some questions for management and perhaps the Board of Directors to address” echoed BTIG’s Walt Piecyk.
When Facebook spent $2 billion on Oculus VR, a virtual reality headset startup, the reaction was relatively sanguine (Reuters Breakingviews even called it “pragmatic”). Google’s $3.2 billion purchase of smart thermostat maker Nest was also seen as a shrewd one. Even the $19 billion Facebook spent on messaging service WhatsApp had its champions.
Theories about Apple’s rationale continue to abound. It’s about adding high-profit-margin devices to its product suite. No, it’s designed to make Apple cool again. Actually, it’s part of a push into streaming music amid dwinding iTunes sales; or simply an acqui-hire of Jimmy Iovine, the talented co-founder of Beats who is well connected in industry circles.
The truth is, nobody knows for sure. And that explains the consternation. The biggest deal in Apple’s history (albeit one it can easily afford) is so out of character for a company whose success has been built on excellent products developed internally. It reinforces the idea, gaining increasing traction, that the company is bereft of ideas and vision. Yet Apple has also got to where it is today by seeing things others don’t. CEO Tim Cook will be hoping Beats is another example.—John McDuling
Five things on Quartz we especially liked
Understanding Alibaba. It’s like more than a dozen western tech giants put together. Its founders’ gender diversity puts Silicon Valley to shame. Its cloud-services division is tiny, but has one big advantage. And Alibaba is making one giant bet. These, and more, from our writers analyzing the Chinese tech giant, which filed for a New York IPO this week.
How Switzerland turns a little coffee into a lot of money. The country—whose entire GDP, we’ve also noted, is about to be eclipsed by the volume of Chinese online shopping—exports more coffee, by dollar value, than anywhere else. How? By turning it into pods, explains David Yanofsky.
Why humans are obsessed with building big. Mega-projects inspire imaginations and act as rallying-points for change. But they almost invariably suffer massive cost overruns if not outright failure. So why do we pursue them? Tim Fernholz talks to the Danish economist who has made it his business to study humankind’s obsession with economic folly.
Your smartphones may be coming by the Silk Road. Adam Pasick on the shifting economics and logistics that are causing companies like Foxconn to start shipping products by rail along the 2,000-year-old trade routes that once brought silk—in some sense, the iPhone of its day—to the West.
How to rig the world’s biggest election. In 2010 Hari Prasad, an Indian security researcher, demonstrated several ways the electronic voting machines India uses could be hacked to give false results, writes Thane Richard. The authorities devised a failsafe system—but have fitted it to only 1% of the nearly 2 million machines in use.
Five things elsewhere that made us smarter
Why is HIV so persistent? Not only condoms, but a whole raft of new drug treatments now make HIV all but completely avoidable, yet infection rates refuse to fall. In Aeon, Jill Neimark argues that despite everything, sex—especially gay sex—remains stigmatized, making it hard for medics and their patients to talk honestly about transmission.
Understanding Putin through science fiction. A short story by one of the Russian president’s closest advisors now seems all too real, writes Peter Pomerantsev in Foreign Policy. It describes a “non-linear war” in a dystopian future that pits multiple factions against each other—an apt description of Putin’s approach to the conflict in Ukraine.
The humans in Star Wars obviously aren’t human. They live long, long ago, they have a big female-to-male imbalance, and they build giant floating colonies. What are they? Max Gladstone on sci-fi site Tor argues the human actors were really representing a species more like bees.
In defense of episodic entertainment. We live in the era of instant downloads and binge-watching. But Robin Sloan on Medium makes a nuanced and thoughtful case that spacing out a story’s episodes is a crucial creative tool, and one being used to good effect not just in television, but in written fiction and other forms of art as well.
What makes the Mona Lisa great? Some works of art are great, but others are merely over-exposed, says Ian Leslie in Intelligent Life. Experiments in the 1960s suggested that people prefer artworks they’ve seen more often; the Mona Lisa was relatively obscure until its theft from the Louvre in 1911 made it notorious.
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