Apple agrees Beats deal for $3bn
Apple has announced its biggest acquisition ever – paying $3bn dollars for Beats Electronics, makers of the popular headphones. The deal includes sister company Beats Music, which runs a music subscription service, and Beats co-founders Dr.Dre and Jimmy Iovine will join Apple in undisclosed positions as part of the deal. Apple hinted that the co-founder themselves were part of the appeal of the brand.
In a formal press release, Apple put more emphasis on the music-streaming element over the company’s production of the well-known headphones, which may answer some of the questions about why Apple have opted to make the acquisition instead of building on their own streaming service within iTunes.
Apple Senior Vice President Eddy Cue said “The addition of Beats will make our music line-up 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.”
For co-founder Jimmy Iovine, this deal is no surprise. He stated that the idea behind their Beats company was inspired by Apple’s unmatched ability to marry culture and technology. The Wall Street Journal has also reported that the Beats brand will remain, even though it will be owned by Apple, which is a first for the company.
However, some remain unconvinced, and feel that there was not a solid rationale for committing to a deal which will not only cost the initial $2.6bn (£1.6bn), but also a further $400m (£239m) “that will vest over time”. Technology writer Benedict Evans tweeted “If you think Apple’s lost it, Beats deal is confirmation. If you don’t, it’s… perplexing. Few really convincing rationales.”