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Microsoft Announces Xbox One Without Kinect, Shipping June 9

Microsoft finally came to their senses and unbundled Kinect from the Xbox One and dropped the price $100. The question remains, at price parity with the PS4, which has been proven thus far to be more apt at running games at 1080p60 better, is this price cut enough?

I already made my choice, and I couldn’t be happier. I was an Xbox guy last generation, but I’m a PS4 guy for this one. I likely will get an Xbox One for it’s exclusives at some point, but not any time soon. They lost me at integration with Cable at a time when more and more people are cutting cable in favor of streaming services.

But Microsoft seems to have finally figured that out too, because the rumor is that you’ll no longer need Xbox Live to watch Netflix or Hulu (or possibly any streaming video service). This is LONG overdue.

Apple to buy Beats for $3.2B

There has been a lot of discussion about this potential acquisition (seems like very close to a done deal, but it’s not finalized yet). Many people, myself included) are scratching their heads and wondering what Beats gives Apple that they couldn’t have done themselves.

The most obvious for most people is the most visible: the headphone business. Beats has somewhere between 50-60% marketshare at the high-end. This is quote notable, but not as much as the profit margins … a $200 pair of headphones costs $14 to make. These make even Apple’s healthy margins look anemic.

Beats as a great subscription music service … but they have only 200K users. Apple arguably has one in some combination of iTunes Radio and iTunes Match, so suggesting Apple couldn’t get there for less than $3.2B doesn’t make sense.

The strongest features in the Beats portfolio is the brand, but if Apple planned to keep Beats as a separate going concern, it would be the first time they’d ever had a subsidiary still operating as it’s own brand (with the possible exception of Siri, which was demoted from product to feature). Beats ONLY works if Apple keeps them going as a separate brand.

Many have suggested that it’s the marketing and dealmaking prowess of Jimmy Iovine and Dr. Dre that Apple is getting, but $3.2B is overpaying if we’re considering this largely an acquihire.

I’m sure we’ll find out more about this soon. Is it possible that there is tech we don’t know about, or a product pipeline, or some other secret sauce that makes the whole worth more than the sum of the parts? Sure. But from the outside, I’m not seeing it.

There is, however, one extremely good reason I can see that Apple should NOT buy Beats.

Beats headphones aren’t very good. Audiophiles consider them a low-end brand masquerading as a high-end brand. The profit margins are strong because they’re $30 headphones selling for 15x COGS. Note that selling an overpriced product that isn’t worth the premium is what Apple is often accused of. It’s not true, Apple’s thoughtful design and premium materials end up in a well-engineered product that is worth a slightly higher price that competing products, and you could argue that with the lower pricing of the MacBook Air, the pricing is aggressive. A long time ago I think you could fairly argue that you were paying more for an inferior product with Apple, but that hasn’t been the case in close to a decade.

If Apple buys beats, won’t that make the stereotype of Apple bilking consumers true? And is that a risk they should take? Apple would have to invest in making the Beats audio quality as good as the brand suggests it is, and Apple hasn’t had a great track record in selling high-end audio products (see Apple HiFi).

Disneyland Resort Trip Report - Day 2

September 9, 2013

This is Day 2 of my Five Part Disneyland Resort Trip Report. Day 1 can be found here.

Day 2 - California Adventure, Carthay Circle Restaurant, World of Color

My wife didn’t sleep very well our first night. New beds are always a bit strange, but I think the flying took a bit out of her as well. So we decided to skip the Disney Vacation Club Royal Member Gathering, get breakfast at the Storyteller’s Cafe, and just go straight to California Adventure. Well, I did … the wife decided she wanted to sleep some more and I just couldn’t wait any longer.

So I went down to the private entrance to California Adventure that they have inside the hotel to scope out the crowd for Extra Magic Hour, and it wasn’t too bad, maybe 30-40 people in front of me. They start letting people into the park about 15 minutes early, and since I was by myself, I bolted in front of the slowpokes with kids and/or strollers. Once you’re inside, you’re held just outside the entrance to Radiator Springs (AKA “Cars Land”).

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