NEW YORK –– On the scenic penthouse roof deck of the posh Gansevoort Hotel, the NBA star Carmelo Anthony and the rapper 50 Cent are sitting next to each other on a too-low bench, and they are both laughing at me.
I’ve just asked a stupid question, a question whose answer is so obvious that it provoked immediate and spontaneous laughter.
The question: If you were running Beats, would you have taken Apple’s $3.2 billion buyout offer?
“I mean, yeah, that’s a no-brainer,” 50 Cent said, practically nudging Anthony with his elbow.
“That’s a no-brainer,” Anthony echoed.
Chuckles aside, Apple’s surprise acquisition of the Dr. Dre/Jimmy Iovine headphone empire Beats has special implications for Anthony and Curtis “50 Cent” Jackson. The pair had come to the Gansevoort to celebrate the recent, felicitously timed launch of a line of water-resistant, noise-canceling fitness headphones for athletes, under Jackson’s 3-year-old SMS Audio brand. The financial opportunity is tremendous: Fitness headphones make up over 50 percent of a headphone market worth $2 billion in the U.S. alone, according to research from the NPD Group.
50 Cent wants a bigger take of that 50 percent. NPD analyst Ben Arnold put SMS Audio’s market share in the premium headphone space at under 1 percent. And so he enlisted Carmelo Anthony, and SMS Audio’s first entry into athletic headphones are on sale now, ranging in price from $80 to $230, depending on how fancy you take your cans.
Since its launch in 2011, SMS has been the other, smaller hip-hop star headphone brand, successful without being omnipresent, thriving without meriting a multibillion-dollar Apple buyout.
Indeed, for years, headphone-makers like SMS, Skullcandy, and the rapper Ludacris’ Soul line have chased Beats, in a hunt for the Cool, that elusive quality that has launched companies like Apple, Ray-Ban, and Lululemon into the stratosphere.
In its latest, and most convincing, attempt to wrangle the Cool, SMS has brought on Anthony as an investor and celebrity endorser for the Sport collection, which joins an impressive array of fashionable, noise-canceling headphones targeted at young people and hip-hop fans.
When 50 Cent launched SMS headphones, the comparisons to Beats soon followed, inevitable as the hook after a verse. (A recent CNN report stated bluntly that SMS had “coped the Beats playbook.”) Three years later, the two hip-hop impresario-led companies appear even more similar –– in their makeup, product offerings, and marketing strategies. Both are multipronged audio companies, partially owned by a mega-popular rapper, pushing multicolored headphones, at a premium price, endorsed by an NBA star who both your mom and your dad could recognize by first name alone.
There is one enormous difference between Beats and SMS, of course, and that’s the Apple logo that could soon be slapped on the Beats box. Beats is about to have billions more dollars and an enormous retail platform to shout and sell from.
“We don’t want to compete with Beats,” Anthony said, when I brought it up. “They’re gonna do their own thing.”
“They’re in a different orbit,” 50 Cent agreed.
But the pair did express optimism about picking up some jaded Beats owners. And not because, in addition to its war chest, Beats will also add on the associative baggage of the Apple brand. Contra the common wisdom, it is not Apple that will dilute the Beats cool, but rather time, they argue. Anthony and 50 Cent both pressed this point in several different ways with me.
“Our society always wants something new,” the soft-spoken Anthony said. “So what’s new?”
“You get to a broad level where everybody’s owned Beats,” 50 Cent, the consummate pitchman, added, “[Everyone] goes, OK that’s cool, everybody has that — I want to try something else; I’ve had that already.”
It’s a theme they both returned to, hammered home, made the leitmotif of the SMS opera:
“This is the new energy, the new energy,” Anthony said, summing up his pitch. “People want what’s new.”
“It’s like when you buy a car,” 50 Cent continued, dunking home the alley oop pass from Melo. “You get a new car, you buy aftermarket parts. You create a new identity. You have a brand new vehicle, but you want different seats, different things to make the car yours.”
SMS Audio’s Street by 50 On-Ear Wireless Headphones, Sport Collection, ships with a sports towel and washable ear cushions. (SMSAudio.com)
No matter how cynical about this venture you may be, you must admit that SMS does seem a natural rival to Beats, if nothing else. With all of those aforementioned similarities — and now, with Carmelo squaring off against LeBron in the advertising world — SMS feels like a candidate to siphon off business, to become the Samsung to Beats’ Apple in the urban headphone space.
And while Samsung has its detractors, becoming the Samsung of the hip headphones space would be a fantastic outcome for SMS.
So are they any good? And does that matter?
SMS headphones themselves have been met with lukewarm reviews. Consumer Reports praised their ability to cancel out noise, while tech sites like CNET and Engadget dinged the units for design flaws and durability concerns. No, SMS headphones are not Bose or Shure or any of the other brands salivated over by audiophiles; that’s not the point. This is a product predicated on style; for most buyers, water resistance and audio quality will be secondary considerations.
I’ve tried the new in-ear, wired sport headphones, in lovely pink, for the past 24 hours, and they’re quite good. They give you a good range of sound, and they stick in your ear during exercise.
But frankly, if SMS, as a brand, becomes cool, then its headphones could be Styrofoam cups duct-taped to a headband, and it wouldn’t matter.
Get Cool or die trying
“Why would Apple buy Beats?” 50 Cent blurted out, toward the beginning of our talk, before I had blundered. “To buy a brand, for a company as strong and established as Apple, means you’re buying Cool.”
That’s the business of SMS, too: Selling Cool. Few other companies can trot out a multi-platinum rapper, in a smooth purple-checkered suit with a silk green bandana, and a top-five basketball player, pulling off a fedora in the way that 99 percent of men will never be able to, and have it feel authentic. SMS can, if only because both Anthony and 50 Cent have skin in the game.
Whether that ends up being worth $3.2 billion will depend on the whims of both the buying public and the coffers of a tech company desperate to associate itself with the elusive Cool.
The NPD analyst Arnold pointed out that there are other, more utilitarian routes SMS needs to take to expand: increasing the retail stores they’re available in, and perhaps diversifying into wearable fitness trackers or sound bars. But no matter the retail presence or the diversity of products, the driver of SMS’ growth looks to depend largely on its public image.
Cool is fickle. It’s a shifting target, it slips through your fingers; you can have it and lose it and never get it back.
Headphones pushed by a hip-hop icon and an NBA all-star will not automatically prove Cool; doubtless, some shoppers will still look on SMS as the other hip-hop headphone brand, the imitator.
On the other hand: The duo of 50 Cent and Carmelo Anthony pushing Cool sports headphones feels like, if not a championship team, then at least a playoff contender. And that is no joke.