Through a special arrangement, what follows is a summary of an article from Retail Paradox, RSR Research's weekly analysis on emerging issues facing retailers, presented here for discussion.
By now you know that Apple has agreed to pay $3 billion to buy Beats. The company's main tangible businesses are its high-end speakers and music gear and a streaming music service. Its main intangible asset is something Apple finds itself in need of: coolness.
While most analysts seem to think the streaming service is the core value brought by Beats, I believe the deal is telling us a few other things and it's important for retailers to take note:
1. The rate of social and technological change continues to escalate. It was only seven years ago that Apple introduced the iPhone. Completely transforming the way we communicate, shop and take photographs was good enough for a while, but by September 2013, Samsung was mocking iPhone users as old and out-of-date. That's fast. Financial analysts are clamoring for something new from Apple. Beats is part of that solution.
2. Wearable tech is the next big thing. There's no escaping it. Bose headphones may be the status symbol of business folk on airplanes, but the young'uns are wearing Beats. And the Beats brand is going to move way past headphones into apparel and footwear. While my preference would be to have my clothes change color every half hour or so, sort of like a 21st century mood ring, I suspect wearable tech will be way cooler and useful than that. Fitbit was only the beginning. I see tech embedded in all our exercise equipment, chips monitoring various vital signs. And they are going to look good. Circling back a few months, I think that's the answer to the question, "Why would Apple hire Angela Arendt away from Burberry?"
It's all going to converge. Fashion is fashionable tech.
Food is a necessity of life. Fashion is fun. Fashion can be the cool new device or it can be a cool new outfit. Ultimately, it will be a combination of both.
Tim Cook is a smart guy. He "smelled" the death of Apple's cool coming and started taking steps to change the game. He may not be Steve Jobs, but he's being like an orchestral conductor, bringing together the best people, products and solutions he can find. That's probably the most important trait a CEO can hope to have.
The future is about more than "phablets." That's in-the-box thinking. What's out of the box? Listen for the Beats.
Is the opportunity around wearable tech more about the technology or fashion?