As reports continue to circulate regarding Apple’s plan to purchase Beats Electronics for a reported $3.2 billion, many are skeptical about what would become the tech giant’s biggest acquisition to date.
Today during an segment on CNBC’s "Squawk on the Street" tech correspondent Jon Fortt shared his thoughts on why the deal could potentially result as a bust for Apple.
“Some would say Beats is cooler than Apple, but in what universe really. Especially outside of the U.S., it’s not,” Fortt declared. “Jimmy Iovine would be a nice addition to Apple maybe in theory, but culturally, no…Apple doesn’t buy brands, generally, especially not hardware brands because it dilutes their own brand. There’s actually potentially negative value here. Apple should buy either the biggest or the smartest in the space. Beats is neither.”
"Squawk on the Street" co-anchor, Simon Hobbs refuted Fortt’s commentary by describing Apple's interest in the Jimmy Iovine and Dr. Dre-founded company as interest to buy into "hip-hop African American cool."
“The company exists because Apple’s headphones were so bad,” Hobbs added. “That’s the gap in the market…I find myself in a very odd situation. Don’t you think there’s a Hip-Hop, African-American cool about this that Apple may have not achieved in other ways. I mean, come on.”
Check out more of CNBC’s "Squawk on the Street" Beats segment in the clip above.