The European Union has no problem with Apple Inc. (NASDAQ:AAPL) acquiring Beats Electronics according to a ruling delivered by the Commission on Monday. The decision brings the close of that deal closer and opens up Apple to a new lawsuit, stemming from the company’s new headphone business. Bose is suing Beats Electronics, and Cupertino is now exposed to that particular legal action.
According to a story that broke on Friday, Bose is suing Beats Electronics over the design of noise-cancelling technology in the iconic headphones. The lawsuit may be a cynical move by Bose to extract money from Apple and Beats Electronics when the companies are in a delicate position. It may be found, however, that the suit has merit, opening up a can of worms that Apple doesn’t want to deal with.
Beats Electronics opens Apple to legal problems
Apple Inc. (NASDAQ:AAPL) is no stranger to patent claims and the company’s lawyers are likely to be ready to defend Beats Electronics with all of their might in the Bose case. There is, however, a danger that the Bose suit, combined with the high price that Apple is prepared to pay for Beats, could result in high payout should a judge swing to the side of the high-end audio vendor.
If Beats Electronics were to lose the case to Bose, the company’s technological base is questionable and actions from across the audio sphere could be the result. Apple Inc. (NASDAQ:AAPL) is, once again, well versed in the best way to dispense of spurious lawsuits, but Beats may be caught up in attacks on the technology it uses to power its headphones.
It is not uncommon for lawsuits like the Bose action to pop up when a company is in a delicate legal position, such as Beats Electronics finds itself in at the moment. The takeover by Apple Inc. (NASDAQ:AAPL) makes dealing with a lawsuit at this time very difficult. Bureaucratic and legal resources are already stretched at Beats, the lawsuit adds to the problems. A quick settlement may suit both parties, and Bose may have initiated the lawsuit in order to force that compromise.
What should Apple do with Beats Electronics
The European Commission ruling, which found that the company’s market share in he headphone and streaming markets would not be unfair after the acquisition, puts Apple and Beats a step closer to a firm combination.
The question is, what is Apple Inc. (NASDAQ:AAPL) planning to do with Beats electronics? The company’s revenue is so small that it will have little effect on anything that Apple does or any number it shows off in the future. There may be a boost to the company’s margins if sales massively expand, but there is no guarantee that Apple is after such an expansion, given the position of its own earbuds in the marketplace.
Apple Inc. (NASDAQ:AAPL) is going to pay out $3 billion to acquire Beats Electronics. The company needs to figure out something to do with it after that money leaves its accounts. Fans of Cupertino decisions, of course, assume the company already has some idea up its sleeve.