With Beats, Apple buys the unobtainable: street cred

If and when Apple enters the wearables market, its biggest problem will be persuading people to wear the technology. A big part of that will be attracting the right early-adopters.

If Apple enters the wearables market, the biggest challenge will be persuading people to wear the technology. Attracting the right early adopters will be key to Apple’s success.

If the rumors are true, Apple’s forthcoming purchase of Beats Electronics for $3.2 billion is all about one thing — making wearable technology fashionable.

Apple is poised to introduce a line of wearables that likely goes beyond the long-rumored iWatch. While the technology Tim Cook’s team is cooking up might be amazing, getting people to wear it — especially cracking the crucial mass market — will be one of the biggest challenges Cupertino has ever faced.

Injecting style into wearable tech notoriously difficult. Even Nike got flustered and discontinued its FuelBand fitness tracker. So far, no company has really cracked the code and turned gear into a fashion statement for the cool kids, with one giant exception: Beats, a phenomenally successful wearable technology brand that dwarfs the rest of the industry because it’s pulled off the hardest trick in the book.

At first glance, Apple’s rumored acquisition of the company is a total head-scratcher. Why would Apple be interested in Beats? Surely Apple doesn’t want the company just for its headphones. How about the Beats Music streaming service? That’s also unlikely to be the true object of Cupertino’s desire. Although well-received, the fledgling music service doesn’t boast a lot of subscribers or appear to be based on any special technology. Rather, it relies on the oldest music technology of all: curators, otherwise known as DJs. Plus, Beats’ licenses would likely have to be renegotiated after any acquisition.

Instead, Apple wants Beats’ most valuable assets: its brand and its unique ability to turn wearables into something people will actually want to wear.

“It’s not about technology at all,” said Robert Brunner, designer of Beats’ first headphones, in an email to Cult of Mac a few weeks before the Apple/Beats rumor hit the headlines. “It’s fashion.”

Brunner was Apple’s first in-house industrial designer. He set up Apple’s legendary Industrial Design Group, which has gone on to became Cupertino’s internal ideas factory. He was responsible for a string of groundbreaking products, including the first PowerBook (which arguably defined the entire notebook segment). Brunner hired Jony Ive and passed the torch to him when he left the company.

After Apple, Brunner co-founded the Ammunition, a design consultancy with offices a block from the San Francisco waterfront. In 2008, he designed the Beats headphones, which were initially sold by Monster, a tech company best known for overpriced cables. Working with Beats, part of the goal was to create products that would be “worn as iconic body art.”

Apple’s challenge? Making wearables wearable

If and when Apple finally dives into wearables, the product line will likely include devices (and maybe even clothes) that monitor fitness and health. The clues are everywhere. Apple has hired executives from Burberry, Nike, Levi Strauss and Yves Saint Laurent. Cupertino has recruited industrial designers with expertise in apparel design and manufacturing — specifically knitting — including Billy Smith from Patagonia and Ben Shaffer, who pioneered Nike’s FlyKnit. Apple’s engineering division has been taking on scores of experts in bioelectronics and low-power health-monitoring devices.

The technology that Apple develops might be amazing and even life-saving, but no one will wear the gear if it looks dorky.

That’s where Beats, the only company that has enjoyed any real success in this arena, comes in. In just a few years, Beats has exploded onto the scene, masterfully blending design, sound, technology, fashion and youth-oriented marketing. It dominates the headphone market with a whopping 60 percent share.

Traditionally, headphones have been sold on price or sound, and Beats offers neither. Nonetheless, they’ve been able to persuade the mass market to spend hundreds of dollars on over-branded headphones that audio snobs say sound terrible. Most tellingly, people hang their Beats around their necks even when they’re not listening to them.

“No one wants to be seen as a sales rep or an arrogant ‘glasshole.’”

“I like to argue that we’re the most successful wearable technologies company in the world,” Brunner told GigaOM’s Roadmap conference last November. “One thing is we understand fashion. We understand what it means that fashion is more than what it looks like, it’s about what you aspire to be, which group you belong to, and which tribe you want to belong to.”

What’s the secret to Beats’ unparalleled success with wearables? The company has focused on three key areas, as Brunner explained in his email:

So the three things about wearables are:

1. It’s more about how you feel wearing it than function. If you don’t feel it’s part of who you are and it is enhancing that, then you won’t wear it. This is where fashion and emotion come in and few tech companies get this. It’s something we focused on day one with Beats.

2. It’s not about technology at all, but about what it does for you and how it fits and enhances your life. It is not magic anymore just to be connected per se. It needs to do something valuable and meaningful in your life.

3. It’s important who adopts it first. With Beats we were overt in enlisting visible, aspirational people to wear the product. Bluetooth headsets and Google Glass are victims of their early adopters and this has — or will — limit how pervasive they will be. No one wants to be seen as a sales rep or an arrogant “glasshole.” Again, it’s fashion and who is wearing it first matters.

Jony Ive, Apple’s head designer, already understands Brunner’s first point. During the design group’s brainstorming sessions, the designers talk first and foremost about how products will make users feel, about the experience of using the product. And in fact, that’s what Apple’s new “Designed in California” campaign tries to articulate. They work backward from the experience to the product.

Apple also clearly understands the second point. Unlike Samsung, which tends to load products with dozens of features and see which ones stick, Apple’s products come out of the gate very focused, with a clear benefit to the user.

The hardest part for Apple will be the third point — defining the early adopters for its wearables.

At the Roadmap conference, Brunner explained that at first, Beats photographed glamorous models wearing the company’s colorful headphones. But Beats Chief Executive Jimmy Iovine instinctively knew this was the wrong approach. Consumers wouldn’t connect with the slender aliens who rule the fashion world’s runways. They didn’t represent a tribe anyone wanted to join. Instead, Iovine gave the headphones to his friends in the music business and photographed them.

“One of my favorite statements Jimmy made to me was, ‘Robert, our marketing strategy is a lot of people owe me a lot of favors,’” said Brunner. “I didn’t understand what that meant. We were shooting the product on beautiful models. He’s like, ‘No, I don’t know any of those people.’ Jimmy would carry the product around and these are his friends, people he knows and he would give it to them and photograph it. And pretty soon, this is how you begin to understand the brand. This is the tribe you aspire to be with.”

Brunner pointed to the infamous photograph of Robert Scoble in the shower with Google Glass to prove his point. “This is a wearable product and the most sensitive thing you ever do is put something around your face,” he said.

When Apple launches its wearables lineup, it will want to associate the products with groups of people that consumers can relate to, groups they want to join. Their tribe.

“Capturing people’s imagination in a way that makes them want to put your stuff on their body is a skill set that not many people have,” Brunner told Wired. “It definitely doesn’t exist in many large corporations.”

Still, it won’t be simple for Apple to marry its strong brand with the Beats label. To date, Apple has acquired companies for technology or talent, not brands. The company’s previous biggest purchase was NeXT for $400 million, a deal that brought Steve Jobs back to Apple (along with a next-generation operating system). Since then, Apple has snapped up smaller, largely unknown companies like FingerWorks (for multitouch) and PrimeSense (3-D motion sensors).

It’s going to be monumentally difficult to marry Beats, a brand that represents aspirational wealth, with the brand that represents Think Different.

Nonetheless, it appears to be a done deal. First reported by The Financial Times, the deal has been confirmed by Bloomberg, The Wall Street Journal, The New York Times and apparently even Beats co-founder Dr. Dre himself. The acquisition would give Apple control of Beats’ hardware and its subscription music service, plus make Iovine a “special adviser” to Tim Cook.

Successfully integrating Beats could give a critical boost to the iWatch and whatever other wearables Apple has up its sleeve. Because the iWatch won’t really be about technology — it will be about fashion. Beats has shown it knows how to turn technology into fashion, and that will be key to persuading millions of people to wear Apple’s technology.

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About the author

Leander KahneyLeander Kahney is the editor and publisher of Cult of Mac. He is the NYT bestselling author of Jony Ive: The Genius Behind Apple's Greatest Products; Inside Steve’s Brain; Cult of Mac; and Cult of iPod. Leander has written for Wired, MacWeek, Scientific American, and The Guardian in London. Follow Leander on Twitter @lkahney and Facebook.

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