Was the Apple/Beats Deal a Hoax?

In a recent Seeking Alpha article, writer Mark Hibben suggests that the rumored deal between Apple and Beats Electronics may be dead and hints the unthinkable—there never was a deal in the first place.

The article goes on to list, point by point, all the reasons the deal may not go through, including the big whopper right at the beginning: "Because Beats Electronics isn't a publicly traded company, there's too little information for anyone outside of Apple to judge if Beats is a good investment."

News of the acquisition began with some speculative articles followed up by jumpy pro-Apple writers looking for any sort of news about the company.

Apple does not reveal a lot. Apple "news" tends to be speculative and based mostly on gossip. A website will get a supposed scoop on something and Apple watchers will spend months speculating about the rumor. Apple TV sets (which I myself have discussed) and the non-existent Apple iWatch are two decent examples.

This results in untoward free publicity for the Apple brand. It also makes an entire cadre of tech reporters and pundits into part of the Apple promotion department with no compensation. I always wonder how Apple would be doing without all this supporting publicity from this crowd.

The first person to come up with the idea that the Beats deal might be bullcrap was Leo Laporte on his weekly podcast, This Week in Tech. I was on this show and witnessed it. The thinking was sound, and when I presented it to others in the tech business who were familiar with Dr. Dre, everyone said that it is the sort of publicity stunt that Dre could be behind. 

But because Apple essentially has a policy of never discussing anything, the Apple Buying Beats rumor was allowed to fester.

Most people in the know found the entire idea ludicrous because Apple had better branding than anyone. If it wanted to roll out headphones it would roll over the competition in a heartbeat. And audiophiles were not too keen on the Beats quality, so it made no sense for Apple, which promotes quality, to buy an inferior product.

But then the over-analysis began. The first idea was that it was about the streaming and not the headphones. Beats has Beats Music, and Apple is losing out to all the streaming services like Spotify since iTunes and the buy-a-song business model was/is over. People wanted streaming, which is essentially a commercial-free pay radio service with more personalization than XM/Sirius.

The insiders responded to that with the notion that anything having to do with Beats streaming is not successful. The dominant player in that space is Pandora. iTunes Radio and Beats Music compete in the space with iTunes Radio doing better business than Beats Music. So this makes no sense either.

Then a new storyline appears. The real target is Jimmy Iovine, the 61-year-old marketing guru, record producer, and Beats co-founder, who would do any deal to work for Apple. Because, god knows, Apple needs more egos in Cupertino.

This obvious disruption of the corporate culture seemed far-fetched, although amusing from a "what if" perspective. Seeing the brainiac collision between Iovine and Jonny Ive would be worth the price of admission.

We still don't know what all this is about but it does make a lot more sense that there is no deal here—and never was a deal here—than the possibility that Apple has gone bonkers.

For more, see Apple Is Buying Beats to Go After Spotify, as well as 5 Reasons Why Apple Shouldn't Buy Beats, and 5 Reasons Why It Should.