In a report released yesterday, May 28, Apple finally confirmed that it has purchased Beats Electronics for an eye-watering $3 billion. The deal will make Apple the sole owners of the famous Beats brand of headphones, speakers, and the new Beats Music streaming service. Rumors have been circulating for a few weeks that Apple CEO Tim Cook wanted to purchase the brand, but when a video appeared online showing a drunken Dr. Dre, and Tyrese Gibson proclaiming Dre to be the first Hip-Hop billionaire, it appeared that Apple backed off, but now the deal has now been confirmed.
Despite reports that Apple was only interested in Beats Music, the deal includes the hardware side of the Beats empire as well. Many still wonder why Apple wanted to purchase Beats, but a sharp decline in the number of iTunes users made Apple spring into action. “Music is such an important part of our lives, and it holds a special place in our hearts at Apple,” proclaimed current Apple CEO Tim Cook. “This is why we keep on investing in music and bringing together these extraordinary teams, this way we can create the most innovative music products.” As a part of the deal both Jimmy Lovine, and Dr. Dre (Andre Young) will become directors at Apple, but as of yet their titles have not been revealed.
Quite how Apple will go about marketing the hardware side of Beats remains to be seen. There are already rumors going around that suggest Apple may in fact sell off the hardware division and focus solely on the music portion of Beats. Beats headphones and speakers are considered by many to be some of the best headphones, and speakers on the market, and starting at $100 for the entry level models, they certainly aren't cheap, but in the short time the products have been on the market, they have become a household name.
The purchase of Beats Electronics which includes $2.6 in cash and $400 million in stock options will now be subject to the regulatory approvals panel, and the deal is expected to close in September. According to Apple CEO Tim Cook, once the deal has been completed, both Jimmy Lovine and Andre Young will be in charge of coming up with the next big thing in the music industry. Many will wonder what will happen now that Apple has confirmed the purchase, but Apple VP Eddy Cue has confirmed that Beats Music and iTunes will remain separate, which will no doubt please both Android and Windows Phone users who have become paid subscribers to the music streaming service.
To celebrate the news, the iOS version of Beats Music has been updated already, and annual subscriptions to Beats Music can now be had for a discounted price of $100 (a $20 discount). If you want to try the service before splashing out, Beats Music has also extended it's free trial to two weeks.
Source(s): Apple, Beats Music