Apple Will Make Money with Beats

Apple Said To Be In Talks To Purchase Beats Headphones CompanyThe tech giant, Apple recently required Beats Electronics for $3 billion and many questioned the move. It wasn’t an interesting choice and it didn’t seem like buying up a headphone company would provide any creative outlets for the future of Apple in developing new products. However, there is more to the acquisition than meets the eye. They may actually turn a huge profit with bringing headphones under their wing.

Remember that with Beats, Apple now has control of a subscription music service as well. They also gain information for 800 million credit cards that they can now leverage. Apple lost a lot of business in iTunes after companies like Spotify popped up. It is much more desirable to pay $9.99 a month for Spotify rather than buying all your music a la carte on iTunes. Now that Apple is in the music subscription service they may be able to win back some of the customers that left them. They also will immediately get the revenue of the 800 million people that already stream music and that’s before they even win new customers back to Apple and iTunes with their new streaming service. KatyHuberty of Morgan Stanley already wrote about how Apple can quickly get back their $3 billion investment, “Spotify, which is generally viewed as the leader in streaming music, has 10M paying subscribers or about 25% of its over 40M active user base. If Apple charges $10 per month, same a Spotify, ever 1% penetration of Apple’s 800M user base, equates to $960M revenue annually, adding 8 point of growth to online services and half a point to total company growth.” Apple has a good chance at winning over customers because they still have the most frequently purchased and used iOS home screen in the mobile market today. They just have to include the beat app on the home screen and the power of suggestion will bring customers to them.

from Douglas MacFaddin’s Tech Market Page http://ift.tt/1siTYLm

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Published by: Doug MacFaddin

Douglas Willis MacFaddin was born June 16, 1961 in the Miamisburg Hospital to Patricia Ann MacFaddin and Richard Willis MacFaddin. My mother’s maiden name is Morrison and she is the youngest of seven children who were raised in Lycippus, PA. My father was the second of four children and was a twin. He was raised in the town of Viola, DE. At the time of my birth, my father worked at the Mound Laboratories in Miamisburg, Ohio in research. Mound was an Atomic Energy Commission facility for nuclear weapon research during the Cold War. My mother made a home for our family. My father passed away in 1991 and my mother is currently living in Avon, CT. Doug MacFaddin is the oldest of five children (Doug, R. Stuart, Anne Marie, Megan and Mary (Heather)). I lived in Ohio for two years, spent the next seven years in Murrysville, PA (outside of Pittsburgh), moved to Little Silver, NJ and relocated my senior year in high school to Avon, CT. My four siblings currently live with their families in Avon, CT and are members of St. Ann’s Church. I attended Mother of Sorrows School in Murrysville, PA. In NJ, I attended Little Silver Point Road School, Markham Place School and Christian Brothers Academy (CBA) in Lincroft, NJ for three years. My senior year, I attended Avon High School and I then spent the next four years at Union College, Schenectady, NY. I received a BS in Industrial Economics and graduated in June 1983. While at Salomon Brothers, I was asked to attend a two-week seminar for Public Finance at the University of Michigan in 1986. In Little Silver, I was involved in Troop 126 where I achieved the rank of Life Scout and was both a Patrol Leader and a Senior Patrol Leader. I also was an alter boy at St. James Catholic Church and spent summers a the Ship Ahoy Beach Club in Seabright, NJ and caddying at the Rumson Country Club. At Christian Brothers Academy, I wrestled for the varsity squad for three years. I took second in the districts my junior year and went on to the regionals. I also ran on their cross country team freshman year and was part of the CBA Colt team that hasn’t lost a duel meet since 1973. My senior year at Avon, I won the wrestling States (S). I went on to wrestle at Union College and qualified for the Div III nationals twice (1981, 1982) and was co-captain both years. My senior year at Avon, CT, I also won the States (S) in pole vaulting. It was the first time Avon High School had a state champ in two sports in the same year. During my four years, I earned nine varsity letters between wrestling, track and football. In 1979, I was accepted into The National Honor & Merit Scholars Society. Upon graduating from Union College, I accepted a position at Salomon Brothers Inc in August 1983. I was an analyst in their Public Finance department at One New York Plaza. I lived in Park Slope, Brooklyn and spent the next four years working at Salomon Brothers. As a result of Black Monday, October 19, 1987 the Public Finance Department of Salomon Brothers was jettisoned to conserve capital. By November 1, 1987, I was working at Dean Witter Reynolds in the new Public Finance Department made up of many of my former Salomon Brother’s colleagues. The new Department was located on the 57th floor of 2 World Trade Center.

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