Report: Apple's arrogance made buying Beats necessary

A new report answers some of the questions raised by Apple’s recent acquisition of Beats. Apple, apparently, has been panicking over on-demand streaming services such as Pandora and Spotify, both of which are seeing much bigger traction than iTunes Radio.

Apple’s recent purchase of Beats has raised many questions. Most people are wondering what, if any, is the company’s real interest in the music streaming service and hardware that Beats has created. Neither seems particularly impressive and deserving of a $3 billion price tag.

But now a report from Buzzfeed claims Apple is desperately trying to catch up to its rivals. It’s own streaming service, iTunes Radio, is seen as a failure due to incompetent executives, and disinterested engineers.

Citing two Apple sources, this story notes that iTunes Radio never actually got what people liked about Spotify or Pandora. The whole service was designed to try and push more song sales on iTunes instead of curating an experience for the user.

So, do any of you guys use Spotify?

Apple engineers involved with the development of iTunes Radio and the now defunct music social network Ping, were supposedly using Spotify and Pandora in their own lives, staying well away from Apple’s products that they actually worked on. “Everyone’s excuse was it’s because we work on iTunes, running and closing the app after every code change,” one source said. “But it’s really because Spotify has all the free music with a real social platform.”

Apple’s employees also confirmed in this report that management actively ignored competitors. Managers refused to open or use Spotify and referred to Pandora as a nonthreatening “dead company” citing its lack of a revenue stream. Obviously, this led to them having no idea what the competition was doing or why people enjoyed their services. A former employee added:

Pandora is an awesome radio that blows iTunes Radio out of the water. Seriously, iTunes Radio sucks and it sucks because of Apple’s arrogance. I was floored by the decision-making skills by management over and over again.

Apparently the company is now looking to fix some of these wrongs with its massive purchase of Beats. Their music streaming service boasted to have 250.000 users just four months after launch, but the real value is the acquisition of talent and industry know-how in the form of Dr. Dre and especially Jimmy Iovine.

We’ll have to wait and see if this move plays out in Apple’s favor and if the new purchase manages to revitalize its music streaming service. But because it was willing to pay such a huge sum of money, it’s safe to say Apple wants to win this.

Source: Buzzfeed | Images via Apple

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Apple has never been in the business of giving customers what they want - Apple is and always has been in the business of selling to customers the products that Apple thinks customers should have which is an entirely different thing altogether.

They've never given a damn about customers except for needing them to pay the bills. Some day people will actually come to understand this.

After dealing with Apple for almost 40 years now, I've yet to see them do anything fueled by what customers actually want, ever.

You are reductdant (entirely / altogether) and contradictory, you see Apple's crappy politics and yet you have been with then 40 years?

The issue with Apple is that they really do not understand/get the whole 'cloud' thing. iCloud is an afterthought for them really and is fairly horrible compared to most any other cloud service like OneDrive. The main drive Apple has is to directly sell you whatever, not to provide you with services which may make you buy more elaborate/extensive options.

Unless they turn around on this they will fall even further behind and in the end it will be their undoing. Microsoft has realized and understood the importance of this far earlier then anyone else. They are way ahead and once the market en large catches up is when they will cash in on this and will cash in big. This is where they IMO will overtake Apple in the next 3-5 years and do so overall, including devices.

I think you're right. Steve Jobs vision has kept Apple going, but you're starting to see the threads on the edges coming apart.

"Apple is desperately trying to catch up to its rivals. It's own streaming service, iTunes Radio, is seen as a failure due to incompetent executives, and disinterested engineers."

Their arrogance is all over the company. Jobs was the worst bully boss ever, his arrogance and treatment of his staff was disgusting. Tim Cook is just as up his own ass and cocky. Apple suits the chavvy Beats brand, maybe they'll both disappear together. Don't like either company, never will. Sick of ranting rappers, and Apple preacher zombies.

To have Dr Dre on board is worth the acquisition alone. His eye for talent is unmatched in the past 30 years. Eminem, Snoop, 2 Pac, Ice Cube, 50 Cent, Kendrick Lamar, The Game...every time Dre swings he hits it out of the park

I agree. I don't really like Rap music, but that guy is an awesome entrepreneur being able to build a billion dollar company. For those that say that beats is overpriced and sucks. Well, it's just like the other fashion brands that make their clothes in sweatshops around the world and charge 200% to sell in first world countries to rich people. It's all about building a nice brand and having a decent product. It doesn't have to be the best, but it's all about experience for the people that might buy these products.

Sonne said,
To have Dr Dre on board is worth the acquisition alone. His eye for talent is unmatched in the past 30 years. Eminem, Snoop, 2 Pac, Ice Cube, 50 Cent, Kendrick Lamar, The Game...

If you like that kind of music then fine. Otherwise, Apple committed a big big big mistake.

Brony said,

If you like that kind of music then fine. Otherwise, Apple committed a big big big mistake.

Doesn't matter if I like "that kind of music", I was noting that not only has Dre had the foresight to sign (and often discover) some of the biggest acts in pop music, he also produced and engineered their albums, most of which have gone multi-platinum. In the past 25 years he is one of, if not the, most successful producer in music.

He also has founded and co-founded several successful record labels, helped pioneer a genre of music that is a huge part of our culture today, his impact on our culture and popular culture worldwide is unquestionable and that is where I believe the value of this deal lies, adding Dr Dre to the Apple brand is priceless.

most of the google execs don't use twitter either and it is no wonder they don't get social. You see the clowns taking every chance they get to push google+ to the point that some of their announcements go unnoticed until somebody tweets about them :)

the best thing beats had going for it was aligning itself with carriers and offering service to all lines for 15 bucks a month... other than that it wasn't anything special imo

Managers refused to open or use Spotify

Wow. If this is true, something is seriously amiss over there... :o That's not even arrogance, that's just wilfull ignorance.

amnesiality said,
iTunes is an ancient piece of ####. They need a web app/music/movie store ASAP.

They just need to split the damn thing up. Let iTunes again be what it was all about in the beginning: music, and only music.

Edited by zhangm, Jun 6 2014, 1:21pm :

CJEric said,

They just need to split the damn thing up. Let iTunes again be what it was all about in the beginning: music, and only music.

there's nothing wrong with having the current functionality, you don't need to use functions that you don't use.

Apple needs to make a html5 web version of the itunes store so that people can buy their music/tv shows without having to install itunes.

Why is Apple considered "arrogant" for a business decision? Last time I checked, businesses exist to make money, so they must have had their reasons. I personally use iTunes Radio while I work and I love it.

patseguin said,
Why is Apple considered "arrogant" for a business decision? Last time I checked, businesses exist to make money, so they must have had their reasons. I personally use iTunes Radio while I work and I love it.

I think it was the fact they wouldn't even LOOK at Spotify which seems incredibly stupid given how popular it is, and how good it is.. I've been a paid subscriber for years and it's right up there with Netflix as one of two services I'd be extremely reluctant to cancel.

Sure, businesses exists to make money, but they refused to look into the competition thinking / believing their own product is great. I don't know if "arrogance" is the right word, my English aint that good, but especially in a market with already so many great services, you need to take a close look at your competition. What makes them great? How can you achieve better results? Why would a user switch from Spotify or Deezer or what other service to yours? iTunes Radio might be "OK", but the majority didn't seem to believe so and not anticipating to this... well, not the "smartest" move imho.

Apple like any other business should look at the competition, they honestly believe that their service may be better without even knowing how the competition does things.

illage3 said,
Apple like any other business should look at the competition, they honestly believe that their service may be better without even knowing how the competition does things.

Looking at the competition and then designing you thing based on that is how you get sued for infringement. You should be talking to the users and finding out what they want from them.

spenser.d said,

Looking at the competition and then designing you thing based on that is how you get sued for infringement. You should be talking to the users and finding out what they want from them.

You know you can look at other peoples products without copying them right? I'm looking at a Dell monitor right now... not copying it... see how easy this is :)

We (Apple) were banking on ourselves (brand name) and our magnificent iTunes service and reputation. So yeah, why even look at the competition. Everyone has an iPhone and iPad, right? Our customers will use them rather than some third party services.

:D

M4x1mus said,

You know you can look at other peoples products without copying them right? I'm looking at a Dell monitor right now... not copying it... see how easy this is :)

Do you work for a company that makes monitors? :rolleyes:

I work for a very large software company and we're forbidden from looking at competitor software by legal as much as we can avoid it. So we don't, and we come up with our own designs by collaborating with our end users, and we're also the national leader in our industry.

Chicane-UK said,

I think it was the fact they wouldn't even LOOK at Spotify which seems incredibly stupid given how popular it is, and how good it is.. I've been a paid subscriber for years and it's right up there with Netflix as one of two services I'd be extremely reluctant to cancel.

Spotify is a huge cash drain, a loss making venture, all the people thinking Apple might buy Spotify are simply deluded. Apple likes profits, not ordinary profits either, they like big fat margins.

spenser.d said,
Looking at the competition and then designing you thing based on that is how you get sued for infringement. You should be talking to the users and finding out what they want from them.

Dude, of all people, I'd expect better sense coming from you man. That doesn't even begin to make sense. Great ideas become the standard; just look at any product around us...

Anyway, I don't see this as arrogance so much as I see this as poor management. The thing with Apple is that, even if this venture doesn't make them very much money at all, they could create revenue by pushing sales to iTunes with it.

I can't tell you how many times I've wanted the ability to buy some of the songs off Spotify, just so that I could burn them to a CD and give them to family members. That lacking ability with Spotify is where Apple could easily see success, generating more sales and also helping the artists make more money than just pennies on song plays.

That's if... IF they can get a decent radio or Spotify-like application going.

dead.cell said,

Dude, of all people, I'd expect better sense coming from you man. That doesn't even begin to make sense. Great ideas become the standard; just look at any product around us...

I'm seriously not making stuff up here. As I mentioned later I work for a software company that is a national leader in our industry and the following is a direct quote from our employee handbook:

We are not allowed to look at competitor's software. Doing so puts us and our customers at risk of lawsuits for infringement of intellectual property rights.

You can say it's dumb all you want, but if you don't want to get sued, you probably shouldn't deliberately look at your competitors and then design your own stuff. We didn't get to where we our by making design decisions based on what we see see directly from our competitors. We hear plenty as we talk to our customers about what they want and what they're lacking with the systems they have before us, but we cannot look at our competitors' software.

patseguin said,
Why is Apple considered "arrogant" for a business decision? Last time I checked, businesses exist to make money, so they must have had their reasons. I personally use iTunes Radio while I work and I love it.

Because they are arrogant... ;)

Scabrat said,
Because they are arrogant... ;)

You know, now that you mention it... I think confident is a better word. Now, I'm just speaking from how I perceive this as a customer, but when Apple does something, they feel like no one can do it better. They advertise it with such confidence that you'll be happy with the product, and have done the homework to hopefully convince you of this as well.

They don't exactly come out saying, "We're still trying guys!" giving you that feeling that this idea may or may not work. Case and point: when I saw the Surface, I considered it to be an experiment! I didn't actually buy one until the second generation came out because I was worried that Microsoft wouldn't see success and just pull the plug on it.

Apple comes out with a bang though, and I give them credit for that. Not everything will always work out (where'd iTunes Ping go?), but it at least they don't have this wavering voice when they speak. That's why everyone sits ready and willing to listen to them whenever they say something, even for people like me who don't use any of their products.

dead.cell said,

You know, now that you mention it... I think confident is a better word. Now, I'm just speaking from how I perceive this as a customer, but when Apple does something, they feel like no one can do it better. They advertise it with such confidence that you'll be happy with the product, and have done the homework to hopefully convince you of this as well.

They don't exactly come out saying, "We're still trying guys!" giving you that feeling that this idea may or may not work. Case and point: when I saw the Surface, I considered it to be an experiment! I didn't actually buy one until the second generation came out because I was worried that Microsoft wouldn't see success and just pull the plug on it.

Apple comes out with a bang though, and I give them credit for that. Not everything will always work out (where'd iTunes Ping go?), but it at least they don't have this wavering voice when they speak. That's why everyone sits ready and willing to listen to them whenever they say something, even for people like me who don't use any of their products.

Confidence - "the feeling or belief that one can rely on someone or something; firm trust."

Arrogant - "having or revealing an exaggerated sense of one's own importance or abilities."

Ignorant - "lacking knowledge or awareness in general; uneducated or unsophisticated."

At the least Apple was ignorant in this matter. And, given their lack of anything appealing coming from their own products, arrogant I think is a better word to describe them.

Now their wwdc announcements was confidence... But this I dont believe was =).