Is Apple Bullying Bose Over Beats Headphone Spat?
You may not know it, but there’s a war being waged over your ears. Well, maybe not for your ears specifically, but there is fierce battle being fought between two prominent companies for the privilege of being the top headphone brand of choice for consumers. And like many epic battles, this one features contrasting opponents with a history of animosity. In one corner is Beats Electronics, the premium headphone maker that was recently acquired by Apple. In the other corner is Bose, an audio equipment manufacturer that holds a number of groundbreaking patents related to audio technology.
Sticking with the boxing analogy, Beats could be characterized as the young up-and-coming opponent who is currently the most popular fighter. Bose could be seen as the long-reigning champion who is trying to defend his crown amid recently waning fortunes. While many industry watchers believe that Apple’s $3 billion acquisition of Beats was mostly about obtaining the Beats Music subscription music streaming service, the company’s headphone business is nothing to shrug at.
According to NPD Group data cited by Re/code, Beats accounts for 61% of revenues in the premium ($100-plus) headphone market. The more established premium headphone maker, Bose, currently only takes 22%. NPD Group analyst Ben Arnold noted that the premium headphone market was worth over $1 billion at the end of the first quarter of 2014.
Now it appears that Apple is preparing to deliver a serious blow to Bose’s headphone market ambitions. According to a “reliable source” who spoke with MacRumors, the Cupertino, California-based company will soon be removing all Bose audio products from all Apple Store locations. Per the source, Apple Store employees will start getting rid of Bose products sometime next week.
While some observers might characterize this anticompetitive move as a low blow on Apple’s part, it is only the latest retaliatory strike in a fight initiated by Bose. Soon after Apple announced that it was purchasing Beats in May, Bose filed a patent-infringement lawsuit against Beats in a Delaware court, as well as an identical complaint with the U.S. International Trade Commission (ITC). In the filings, Bose alleged that Beats’ Studio and Studio Wireless brand headphones are infringing on five of its patents, including some that are related to its proprietary noise cancellation technology.
As reported by Bloomberg, Bose and Beats recently told the court in Delaware and the ITC that the dispute has now been settled. However, while the threat of an ITC import ban may have been enough to spur Apple to remove Bose’s products from its retail stores, a recent kerfuffle concerning Beats headphones and the NFL may have been the straw that broke the camel’s back. As reported by Re/code earlier this month, Bose secured an exclusive sponsorship deal with the NFL that bans players and coaches from wearing any other brand of headphones in front of television cameras. The policy extends to all pre- and post-game interviews, as well as practice games and training sessions.
San Francisco 49ers quarterback Colin Kaepernick recently found out just how serious the NFL and Bose are about this policy when he was fined $10,000 for wearing a pink pair of Beats headphones during an interview after a game on Sunday, reports ESPN. Kaepernick has an endorsement deal with Beats and was featured in a commercial that showed the quarterback using the headphones to drown out noisy fans — a scenario that is now subject to fines in real life.
So regardless of which brand of headphones you prefer to cover your ears with, it appears that Apple’s rumored plan to boot Bose from its retail stores is just the latest escalation in an ongoing battle.
Follow Nathanael on Twitter @ArnoldEtan_WSCS