In a world of information and data overload, security problems, and privacy issues, curated experiences like the ones offered by Apple gain value over time -- first with the App Store and now possibly with Beats Music.
Jimmy Iovine, one of the founders of Beats, refers to algorithms as a "utility." The quality of Beats Music seems to prove the value of going beyond algorithms by adding expert curation. Compare the search results of Beats Music to those of Pandora or Spotify. Art collections are curated, and music is an art form. With Beats Music Apple may again be positioning itself at the intersection of technology and the liberal arts.
Expert curation also increases in value as the drive for advertising revenues adulterates the quality of algorithmic search.
Michael Porter notes that companies should compete to be unique rather than competing to be the best. See Concepts page and discussion of Michael Porter. If Apple consumates a deal with Beats, it will be competing to be different/unique through a proprietary, curated streaming service (Beats Music) that differentiates the iPhone from its competitors. For this reason Beats is worth more to Apple than it is to its co-founders, Dr. Dre and Jimmy Iovine, as a stand-alone company.
And mobile headphones, mobile sound quality, and music streaming/discovery/curation are still areas that aren't yet "good enough." Additionally, while there are various ways to measure sound, sound quality/appeal is ultimately subjective. This works in Apple's favor, allowing it to avoid product comparisons based on speeds and feeds -- Beats products are unlikely to ever overserve.
The author owns stock shares of Apple.