Apple Inc.'s Beats Acquisition: The Best $3 Billion It's Ever Spent?

Making sense of some of the emerging financials behind Apple's recent Beats buyout.

Jun 6, 2014 at 8:00AM

Apple (NASDAQ:AAPL) investors have shifted their attention to the Apple storyline du jour, its World Wide Developers Conference, and for good reason.

During the keynote speech on Monday, Apple's executive team unveiled a sweeping series of fresh innovations and product upgrades that left the tech world buzzing. But the steady stream of news that's emerged from Apple's WWDC this week has largely overshadowed what could very well be the most important Apple storyline of the first half: its $3 billion Beats buyout that was officially announced last week

Beats Music On Ios

Source: Beats.

Apple bets big, wins big on Beats
Since Apple's announcement, we've seen more specifics emerge pertaining to the exact financial details behind Beats' business, which certainly helps shape our understanding of Apple's likely reasoning in consummating this deal.

We now know that $2.5 billion of the total $3 billion deal value was allocated to Beats' headphone business, which then also pegs a value of around $500 million for Beats Audio. And as Beats Audio remains a fledgling, albeit thus far well-received, business, this once again supports the idea that Apple truly wanted Beats for its executive team at the end of the day. In the following video, tech and telecom specialist Andrew Tonner looks at the financials of Apple's Beats buyout in greater detail.

This 1 wearables stock will put Apple to shame
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Andrew Tonner owns shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

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David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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