Ending weeks of rumours and speculation, Apple finally buys Dr Dre's famous headphone maker and music-streaming service provider Beats Electronics. Krishna Bahirwani finds out what the $3billion dollar deal means to Beats and Apple
After a lot speculation, Apple finally announced it will acquire the popular subscription-based music streaming service Beats Music, and Beats Electronics, which makes the popular Beats headphones, speakers and audio software. As part of the acquisition, Beats co-founders Jimmy Iovine and Dr Dre will join Apple but Beats Music will not be affected and will remain available even on other platforms. Apple is acquiring the two companies for a total of $3 billion, consisting of a purchase price of approximately $2.6 billion and approximately $400 million that will vest over time. Subject to regulatory approvals, Apple expects the transaction to close in fiscal Q4.
"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," said Tim Cook, Apple's CEO. "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." Jimmy Iovine is no stranger to the music industry having for over a decade, been a crucial part of Apple and iTunes. He has made music with some of the best musicians in the history of the iTunes Store, helping make it the world's number one music retailer.
"I've always known in my heart that Beats belonged with Apple," said Jimmy Iovine. "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."
"Music is such an important part of Apple's DNA and always will be," said Eddy Cue, Apple's senior vice president of Internet Software and Services. "The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years."
Beats was founded in 2008 as the brainchild of artist and producer Dr. Dre and Chairman of Interscope Geffen A&M Records Jimmy Iovine. Beats Electronics (Beats) comprises the Beats by Dr. Dre a line of headphones, earphones, and speakers and Audio software and streaming music subscription service Beats Music.
"Beats Music is based on the belief that all music has value and this concept was instilled in every step of its development. " said Trent Reznor, who serves as Beats Music Chief Creative Officer.
"Beats was created so people could hear the music the way the artists intended, but speakers were just the first step," said Luke Wood, President of Beats Electronics.