In the following video, tech analyst Eric Bleeker and Max Macaluso discuss Apple's $3 billion buyout of Beats. The deal was formally announced last Wednesday and has left Wall Street analysts and Apple observers scratching their heads. It was Apple's largest purchase ever by almost an order of magnitude, and it wasn't one that had been heavily speculated on before news of the impending deal leaked.
Focusing ion why Apple felt compelled to purchase Beats, Eric discusses an interview with Tim Cook hosted at the CODE conference the day the deal was announced. In the interview, Cook discussed how music had always been a huge component of Apple's identity, and that the deal was focused on ensuring it hired musical talent like producer and Beats co-founder Jimmy Iovine and Dr. Dre.
iTunes is increasingly becoming irrelevant in the music space. Digital music track sales were down 6% last year. The future of music looks less and less dependent on songs users have purchased a la carte and instead is shifting to a monthly service where listeners pay for a wider selection. So while Beats headphones racked up an impressive $1.3 billion in sales last year according to The Wall Street Journal, Eric believes the best way to look at the deal is ensuring Apple stays relevant in music both from the talent it acquired -- Iovine and Dr. Dre -- and by purchasing a streaming service that has already cut deals with major labels.
To see Eric and Max's full thoughts, watch the video.
Are you ready for this $14.4 trillion revolution? Have you ever dreamed of traveling back in time and telling your younger self to invest in Apple? Or to load up on Amazon.com at its IPO, and then just keep holding? We haven't mastered time travel, but there is a way to get out ahead of the next big thing. The secret is to find a small-cap "pure-play" and then watch as the industry -- and your company -- enjoy those same explosive returns. Our team of equity analysts has identified one stock that's ready for stunning profits with the growth of a $14.4 trillion industry. You can't travel back in time, but you can set up your future. Click here for the whole story in our eye-opening report.