“Jump the Shark” is a cultural idiom initially declared when a long-running TV show uses a gimmick to maintain interest of viewers. The same idiom applies to brands, now including Apple since the acquisition of Beats Electronics LLC.
So that you have an understanding of who Beats Electronics LLC is, here is a quick excerpt about Beats from their website.
“Beats Electronics (Beats) comprises the Beats™ by Dr. Dre™ family of premium consumer headphones, earphones, and speakers as well as patented Beats Audio™ software technology and streaming music subscription service Beats Music™.”
Why do I feel Apple is Jumping the Shark?
Leaning on another Brand = Jump The Shark
Brand 101 – Never dilute your brand. Beats’ brand recognition, preference, loyalty and advocacy is not of the same pedigree as Apple’s, but it is fairly significant. Apple is a technology and culture brand with an essence of purity. This was established through decades of building both the hardware systems and software which ran on them. Sure, they acquired companies to achieve competitive advantages but the scale of the brand awareness between Apple and their acquisitions were enormous.
Artificial growth = Jump the Shark
If you’re not growing, you’re shrinking. Apple has struggled pre and post Steve Jobs to maintain brand enthusiasm and loyalty via innovation. There are four main reasons why a company would buy another, in absence of these you’re just creating news for investors:
- Patents – this is typically an offensive or defensive strategy. After reviewing the Beats Electronics LLC patents, including those carried over from MOG, there doesn’t appear to be anything of significance.
- Revenue Stream/Margin – The revenue and margins a proportionally too small to have a significant impact.
- Brand Equity – Apple has exponentially more brand capital the Beats.
- Mature technology – Apple obviously has could benefit from acquiring Beats Music service but Apple has the experience, technology and talent to mature their current platform vs. replumbing their systems to integrate with Beats Music.
Photo credit: Apple-about.com