Why Apple pulled the plug on Monster
The backstory to the lawsuit that Monster LLC filed in January against Beats Electronics LLC would take too long to tell here.
If you’re interested, Sam Biddle did a bang up job for Gizmodo two years ago, before Apple bought Beats and put Jimmy Iovine in charge of what Apple now calls Apple Music. The long and short of it is that Iovine, one of the toughest dealmakers in a tough industry, cut a deal where Monster designed, manufactured and distributed Beats headphones and got none of the rights, none of the $300 million HTC paid for a 51% stake in Beats, and none of the $3 billion Apple paid for 100%.
The point is, when you mess with Apple—even at arms length, through an entity it acquired—you’re messing with a company that has tons of cash, swarms of lawyers and many levers of power with which it can squeeze a troublesome partner.
And so it was that Monster went to the Wall Street Journal to complain that Apple had revoked its authority to make licensed accessories for Apple devices—pulling the plug, as it were, on its high-margin MFi (Made for iPhone/iPod/iPad) cables.
“It shows a side of Apple that consumers don’t see very often,” Monster’s lawyer told the Journal. “Apple can be a bully.”
According to Monster, it has made roughly 900 different products for Apple devices since 2008 and paid Apple some $12 million in licensing fees.
If this story sounds familiar that may be because Apple put a similar squeeze on Bose last year, briefly removing its high-end headphones from Apple Store shelves. Bose and Apple settled, and a month later Bose was back.
I wouldn’t be surprised if Apple and Monster also found a way to patch things up.