Analysts’ reactions to Apple’s Beats acquisition have been mixed
Two weeks back, tech giant Apple announced its acquisition of headphone maker Beats Electronics in a $3 billion deal --- a move which has fetched mixed reactions from tech-industry experts and analysts.
Terming the Beats acquisition as a "defensive" move by Apple, Wells Fargo analyst Maynard Um said that, it Apple wants to position itself better in the tech industry, it should acquire "offensive assets." Um presently has a 'Market Perform' rating and a 'valuation range' of $595.00 to $640.00 on the Apple stock.
Analysts who are comparatively more bullish on Apple shared than Um are also not too pleased with Apple's decision to buy Beats for $3 billion. The acquisition was described as a "bad idea" by Piper Jaffray analyst Gene Munster, when rumors of the Apple-Beats deal first started making rounds in May. Munster currently has an 'Overweight' rating and a $732 price target on Apple.
However, both Um and Munster - who felt that the Beats acquisition deal by Apple was a somewhat drab move - said that the best part of Apple's acquisition of Beats was the fact that Beats co-founder and music industry insider Jimmy Iovine would join Apple.
While Muster theorized that Apple's primary motive to go ahead with the Beats acquisition was apparently to bring Iovine on board, Um asserted: "Iovine would bring music industry contacts and the design team could help with Internet of Things."