Apple Takesover Beats Electronics

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In conclusion, with the acquisition of Beats Electronics, Apple partly gives up its attempts to establish a competitive own-branded audio device business unit. Hence, the Californian multi media giant has conditionally accepted its failure of establishing iTunes as a competitive product in the online streaming war and has acquired a competent and powerful ally in order to regain a strong competitive position within the recently, dramatically reshaped music streaming industry.

The acquisition classified by The Bower (2001) Methodology

From the Bower Classification it can be deducted, that Apple’s acquisition of Beats Electronics has been realized in order to counteract against major disruptive industry developments which require respectively reshaped product portfolios ready to be launched in the blink of an eye.

Thus, Apple has been imperatively urged to find an immediate solution that on the one hand fosters the company’s R&D efforts, and rapidly extents its product portfolio on the other. In that matter, the acquisition was a sensible decision as the integration process of Beats Electronics will be reasonably manageable as Apple disposes of resources that surpass those of Electronic Beats many times over.

Referring to the Bower (2001) classification, it can be concluded that Apple chose to acquire Electronic Beats for its high degree of industrial convergence. The disruptive nature of the online music streaming industry led to fundamental transformations of the industry, which in return evoked the necessity to achieve greater industrial convergence by any means. As mentioned earlier, Apple failed to redesign iTunes within the adequate time to market and thus, was simply outpaced by competing, highly innovative products that contrary to Apple, accurately met the scant time to market.

Furthermore, as elaborated earlier, the acquisition represents an attractive alternative to amplify Apple’s R&D assets, as compared to develop R&D assets entirely internal. The great proximity of both companies involved in the acquisition in association with the immense cultural capability, is according to Bower a given reality that is essential for the successful creation of synergies when combining R&D resources.

All in all, it can be stated that from Bowers perspective the acquisition was well reasoned by Apple’s executive board. The cause and effects that urged the need for a strategic action of such scope and scale constitute decent grounding for justifying the decision made by Tim Cook and his team.