Dr. Dre is about to become the self-proclaimed "first billionaire in Hip-Hop" as Apple makes its biggest acquisition to date.
Apple's purchase of the audio company, which many news outlets reported as a done deal earlier this month, became official today with an announcement from the tech giant. Apple will retain the Beats brand on the company's line of headphones and its existing streaming music service while continuing to offer iTunes for purchases as well as streaming music via iTunes Radio. Beats Co-Founders Dr. Dre and Jimmy Iovine will join Apple and develop new music-related products for the company.
News about the acquisition broke earlier this month along with a video of Beats Co-Founder Dr. Dre celebrating the deal, but no official word of the acquisition came until today. Some news outlets suggested the delay manifested because the deal still needed finalizing by both sides, while others said the move would be revealed around the time of Apple's annual Worldwide Developers Conference, which takes place next week.
The move comes as Apple seeks to reinvigorate its music brand. While Apple pioneered the pay-per-song model via its iTunes Store, the service in recent years has lost ground to streaming music competitors like Pandora and Spotify. Apple experimented with its own streaming service in iTunes Radio, which allows users to listen to songs and purchase them through the iTunes Store. However, since its 2013 launch, only about 1-2 percent of users have bought songs via iTunes Radio while the company's music store sales continue to erode.
The company's decline in the music market prompted Apple to make big moves to gain more ground in music sales, and the acquisition of Beats signifies a big first step towards that goal. Apple CEO Tim Cook told the New York Times that Iovine and Dr. Dre will work on the next generation of music products offered by Apple.
“They’re going to be coming up with ways of features that blow your mind,” Cook said. “And products you haven’t thought of yet, and seeing around the next corner to articulate the way to take music to an even higher level than it is now.”
The acquisition of Beats by Apple is expected to be completed by the end of the year.