In what was one of the worst kept secrets of the personal tech industry, Apple has has confirmed the intentions of acquiring the headphone manufacturer Beats Electronics for $3 billion. This will be the biggest acquisition that Apple has ever made and the deal is expected to go through in the fourth quarter of this year with $2.6 billion to be paid in cash while $400 million will be paid in stocks. Beats co-founders, Jimmy Iovine and Dr Dre will join Apple as a part of the deal making Dr Dre the first billionaire in the hip hop space. Obviously the deal going through is subjected to several regulatory approvals which will take place over time.
Beats Electronics for now will continue to function as an independent brand, though obviously it would be reporting to Apple now. Eddie Cue will be heading the Beats Music Division while Phil Schiller will be in charge of the Headphones and Speaker group. Beats will continue to offer the music streaming service to their existing customers on Android and Windows Phone. The Music Streaming services of Beats was one of the main attractions for Apple given its interest in the world of Digital Music Distribution. However, with declining numbers in digital music downloads thanks to people who prefer a streaming model, combined with relative failure of iTunes Radio means that Apple will definitely be pushing the streaming service harder than Beats ever did. New peripherals including headphones and other ‘mind blowing’ gear is also expected to come from Beats Electronics.
— Tim Cook (@tim_cook) May 28, 2014
Iovine and Cook both obviously sounded very excited about this move and cannot wait to get working together on the future products from the two companies. Iovine said:
I’ve always known in my heart that Beats belonged with Apple. The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special
Tim Cook’s statement included:
Music is such an important part of all of our lives and holds a special place within our hearts at Apple. That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.