Should Microsoft acquire SMS Audio, the headphone company?

This is not a category I usually focus on but it hit my radar because of my extreme interest in all things entertainment.

At this point you would have to be an alien not to have heard about Apple’s (AAPL)’s acquisition of Beats – the headphone brand.

What a lot of people focused on was the fact that the acquisition made co-founder Dr. Dre (Andre Young) the first african american billionaire rap entertainer. The deal also made his co-founder Jimmy Iovine extremely wealthy as well.

What is less discussed is the fact that until recently, Curtis (50 Cent) Jackson, the superstar rap entertainer, was on Jimmy Iovine’s record label and was also working on a competing set of headphones.

According to Mr. Jackson, the competition was a source of acrimony and between him and Mr. Iovine.

Why is this personal context important?

Well, in 2011, Curtis Jackson founded SMS Audio. SMS stands for “Studio Mastered Sound.”

In August of that year, Mr. Jackson acquired KonoAudio for an undisclosed amount in order to rebrand it using his name.

SMS Audio is a private company but due to Mr. (50 Cent) Jackson’s involvement, has rapidly gained marketshare and brand recognition.

Recently, they were able to acquire a license from Lucasfilm to create a very profitable, limited release, set of Star Wars headphones. This is an example of the cache that Mr. Jackson’s association brings to the brand.

Music Producer Timbaland and American NBA superstar basketball player Carmelo Anthony  are now active ambassadors and investors in the brand as well.

Recently, in an interview with the Wall Street Journal (below), Mr. Jackson (who owns 51% of the company) expressed his excitement about the brand and the space and more importantly, did not rule out acquisition by a larger company.

In the same interview, Brian Nohe, the current President of SMS Audio and minority owner of the company said the public should look out for a major announcement from SMS about an upcoming deal with a technology company.

Speculation from Gizmodo states that the cutting edge announcement later today will be a biometric earphone.

Our sources, who asked not to be named, tell us the product will be called the BioSport In-Ear, a biometric earbud based on the same prototype technology that Intel showed at CES in January.

The Apple acquisition has made it necessary for competitors in the space to contemplate adding headphones to their ecosystem so I think that there might be an acquisition on the horizon for this brand.

Whatever is the case, it seems to me that this is a company that Microsoft might do well to acquire.

What do you all think? Should Microsoft acquire SMS Audio?

Use the comments below and let us know what you think…

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  • Steve O

    Yeah like Microsoft need more problems….

  • JohnnyB

    Maybe. I mean, I would get the point of doing it, but overall, it seems like a total response to Apple and Beats. On the other hand though, you can never have enough assets. So if they’re worth it, then they should go for it.

  • Ray C

    Well, so much for the idea that Microsoft would never do anything like this under Nadella. I think they should buy it only if they can get 50, Carmello, and Timbaland to be much bigger public faces of the brand.