Apple’s emphasis on the human angle of Beats provides an intriguing peek into how Apple sees itself – and how executives wants customers to think of Apple

What the Beats Deal Says About Apple: It Loves Tastemakers

By FARHAD MANJOO

MAY 30, 2014 1:47 PM 7 Comments

There’s one thing executives at Apple would like you to know about their decision to buy Beats Music: Apple really loves humans. It loves us in the general sense — the company believes we’re better than computers are at deciding what kinds of music we like — and it loves the specific humans who run Beats, especially the firm’s founders, the music impresarios Dr. Dre and Jimmy Iovine.

“This whole idea of human curation we think is huge,” Timothy D. Cook, Apple’s chief executive, said this week in an interview with The New York Times. He was referring to the Beats streaming service, which enlists a group of musically savvy tastemakers to shape listeners’ playlists. Competing services like Spotify rely on data-driven algorithms to select your music. “It’s something that a technology company alone wouldn’t do,” Mr. Cook said. “Everybody would be focused on the zeroes and ones and how to make it machine learning, and forget about the human approach to it.”

There’s no small amount of hype here. After all, Spotify has been able to sign up 10 million subscribers, compared with just a few hundred thousand for Beats. So the contention that human-selected music is superior seems suspect.

Yet Apple’s emphasis on the human angle of Beats provides an intriguing peek into how Apple sees itself  — and how executives wants customers to think of Apple.

If Silicon Valley is known, in the popular imagination, as a place bent on replacing human judgment with algorithmic efficiency, Apple wants to hold itself up as the one tech company that stands proudly against that trend. The firm has long played up personal dimension of tech. But the Beats deal, as well as several recent hires from the realms of luxury fashion and design, point to the firm’s growing interest in human curation and, especially, culturally-savvy expertise. Apple is doubling down on tastemakers.

In addition to Dr. Dre and Mr. Iovine, the firm recently hired Angela Ahrendts, the former chief executive of Burberry, to head up its retail division. Last year it hired Paul Deneve, who used to run the fashion house Yves Saint Laurent, to work on unspecified special projects at the firm. It also scooped up Ben Shaffer, who led the team that designed Nike’s innovative Flyknit running shoe. And at the top of this pyramid sits Jonathan Ive, Apple’s celebrated design chief, who now oversees both hardware and software design across the firm’s product line-up.

One interpretation of Apple’s growing attachment to high-culture is that we’re witnesses an inevitable reinvention, the first clear signs of what the company might become after the death of Steve Jobs. Ben Thompson, who writes the tech analysis site Stratechery, recently argued that the Beats deal suggested that Apple was transforming into a fashion house itself — a firm that “seeks to transcend computing, demoting technology to an essential ingredient of an aspirational brand that identifies its users as the truly with it.”

Mr. Thompson argued that the marketing shift could prove financially savvy in Asian markets, the most important areas for Apple’s long-term growth, where fashion brands are coveted and command premium prices. In an increasingly cut-throat tech business, where every technical innovation quickly becomes a cheap commodity, Apple’s emphasis on design, luxury and the perception that its services are meticulously curated by cultural experts might prove more lasting.

On the other hand, there is a more practical explanation for Apple’s interest in grabbing up a stable of cultural tastemakers: It takes all these people to replace Mr. Jobs.

In the past, Mr. Jobs stood as Apple’s sole authority on taste, the perfectionist who obsessed over every color and every material in every product, and whose interests ranged across cultural categories, from industrial design to music to retail. His decisions weren’t always right — he was initially opposed to third-party apps on the iPhone, among other errors — but the perception that he’d personally shaped customers’ devices was, at the very least, a handy marketing tool for Apple. Technology is complicated, and in a crowded market, every Apple product stood out with an implicit guarantee. Mr. Jobs, a tastemaker like no other, had taken care of all the hard work. Now you just had to use it.

In picking up gurus from fashion and music, and by emphasizing Apple’s commitment to human curation over algorithmic decision-making, Mr. Cook may be aiming to optimize what has always been Apple’s core strength, and what it lost when Mr. Jobs died: Human perspective and taste. Jony Ive, Angela Ahrendts, Paul Deneve, Ben Shaffer, Dr. Dre, and Jimmy Iovine — think of them as Apple’s Jobs Team.

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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