After weeks of rumors flying around that Apple was interested in buying Beats Electronics, it has finally happened. Apple has bought Beat Electronics and Beats Music music service for $3 billion. $2.6 billion is in cash and $400 million is in stocks. Jimmy Lovine and Dr. Dre, the co-founders of Beats Electronics, will also be working for Apple.
The initial reports indicated that the sale was $3.2 billion. The sale of Beats Electronics was rumored to be in jeopardy because of a video of Tyrese Gibson and Dr. Dre celebrating the sale of Beats Electronics before the official sale. Apple was said to be furious over the video. It seemed as if the sale was going to be called off but Apple couldn't say no to Beats. Beats Electronic headphones dominate the market and they also have a music service that can compete with Spotify. Apple had to overlook the video and do what was best for their company and their future.
The sale of Beats Electronics will likely put Dr. Dre in the billion bracket. He will be the first rapper to become a millionaire. A few years ago, that wasn't even possible. Dre has made smart investments and Beats Electronics was the jackpot. Jay Z and Diddy are still climbing the ladder to become billionaires but they won't be able to brag about being the first rapper to become a billionaire. Dr. Dre, who mostly produces, has that honor.
Tim Cook, CEO of Apple, said in a statement “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.”
This acquisition might give Apple the leverage they need to dominate the music streaming market. Spotify should be very worried right now.