Apple’s recent $3 billion ($2.6b in cash, $400m in equity) acquisition of Beats Electronics and Beats Music, cofounded by Dr. Dre and Jimmy Iovine, piqued a whirlwind of speculation among tech industry analysts. Speculations have soared: There must be some-something, a next, a newer innovation that Apple has up its sleeve. This largest acquisition in Apple’s history puzzles many. Without knowing what or when a new technology might drop, the wealth of this Apple-Beats deal is already on display.
As a matchup between style, cultural trends and technology, Apple has just purchased a critical piece for taking its version of embodied (wearable) technologies to the next level.
The Beats acquisition involves hard deliverables of a music streaming service and headphones. But, with it, Apple also obtains access to invaluable consumer intermediaries and a youthful, active cohort of technology consumers. This deal amplifies Apple’s network power: power within the music entertainment industry, power within the streetwear industry and, perhaps, an overlooked power within the sport industry.
Within days of the announced acquisition, Beats released its latest advertising. In a five-minute feature, The Game Before the Game, packed with sport celebrity firepower, the camera focuses on Brazilian soccer striker Neymar Da Silva Santos, Jr. sitting alone on the floor in a darkened room with Beats headphones. The space is filled with a man’s voice and words of inspiration, connection, reflection, confidence, and love.
Viewers come to recognize that Neymar Jr. is on the phone with his father.
Without abrasive product placement, the phone distinguishes itself even in shadow and silhouette, without a lingering focus or sharpened camera attention on a logo, as, of course, an iPhone. Surrounded in words from home, Neymar Jr. is connected and comforted wherever he is – afar or alone – and readied for his endeavor. The call ends. The music and momentum intensify.
In the feature, a powerful seduction process is underway, as viewers walk through the personal, inner space of athletes in pre-game rituals. As athletes get “psyched up” for the game, as fans put on their replica jerseys and face paint, Beats stitches the various moments together. The feature powerfully assembles Beats products, music, global soccer heroes (e.g., Mexico’s Javier “Chicharito” Hernandez, France’s Bacary Sagna), and other sport icons (e.g.,Serena Williams and LeBron James) and sport dreams.
This sport-focused ground has already been trodden by Beats, but for Apple, entering elite sport markets is a big deal. Apple has yet to establish its wearables with “street cred,” much less as essential sport gear.
This high production-cost, promotional feature is packed like a style board – except that Beats does not have to pick or choose among the images, lifestyles, and identities it wants to target with this advertisement. The ad dials in its audience in a more inclusive, rather than segmented manner.
The advertisement tells a story about sport, our lives, rituals, how we connect with others and how we connect without our most desired, powerful inner selves – who we want to be.
Without stating or showing it directly, the stage setting is the World Cup.
To be clear, neither Apple nor Beats Electronics are official sponsors of the World Cup. Toeing the line of ambush marketing, Beats titles its ad campaign as being about the pre-game terrain.
There is no need to occupy the actual space of the World Cup when this pre-game space has such reach. Beats has no need to infringe upon the sacred space of sport venues with its advertising campaigns when the online territory is so favorable to spreading its message. Though it does have experience with this ‘ambush marketing’ controversy, too.
Headphone branding controversies heightened at the 2008 Olympic Games when athletes on the U.S. Basketball Team strutted on court with Beats headphones and Michael Phelps appeared on the pool deck wearing a competitor brand’s, SOL REPUBLIC, headphones. Not only have the boundaries of permissible branding been pushed at the Olympics, but Beats has established itself as a staple training tool of athletes.
Beats works to keep itself in sport spheres. Beats designs customized promotional headphones for many top athletes – 2014 Super Bowl players received diamond-encrusted headphones estimated worth $25,000.
Beats shows up in and around elite performance spaces the world over, and this is a critical aspect of its brand appeal for Apple.
As Apple steps up its game in this inter-merging sport-technology market with the acquisition of Beats, other sport industry players such as Nike are seen to be backing out of the technology industry, letting go a bit. The Nike FuelBand, the wearable technology that measures heart rate, caloric burn and steps/distance, is now in its last edition.
Apple’s press release describes the acquisition of Beats as a connection. “I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine.
This public statement is also suggestive of the type of cultural relationship that Apple aspires to nurture through this new union. This is a marriage of culture and technology.
The merger is evidence of a thickening of convergence culture – a further and more formalized nexus of sport, entertainment, and technology industries. The wisdom guiding Apple seems to be “when you find the right partner – go for it.”
This is a moment of significant market repositioning.
Apple’s attraction and high dollar union to Beats is for all the right market reasons. Beats is exciting and popular. Apple knows that technology is not just driven by the rational. Artful partnerships can achieve new heights of market dominance.
Apple wants to be cherished by consumers. Enthusiasm, fun, swooning, compelling come-ons and sparks are necessary elements in innovating technologies that lead – rather than emulate – social trends.
With its proven track record as a wearable technology, Beats has captured the headphones market. Gearing up to set out in new directions in the wearable industry, Apple knows that change is always an opportunity to botch things up, or to miss the mark. Beats lessens this risk: Beats is good for Apple’s clout in the streetwear fashion and sport markets.
Like Beats, Apple wants to outfit athletes. Apple wants to merge with our lives, passions, and bodies. And what greater way to do this than through sport? Attempting to mobilize technology through sport and vice versa, Apple reintroduces itself as a sport training technology.
Rook Campbell is a Visiting Professor of Communication and Political Science at the University of Southern California. @cabinet48