Dr. Dre is reportedly close to becoming the richest man in hip-hop. According to NBC News on Friday, a proposed deal from Apple to purchase Beats Electronics could make Dr. Dre the world’s first billionaire rapper.
The bid from Apple is reportedly valued around $3.2 billion and if the deal goes through, Dr. Dre will be a wealthy man as the co-founder of the headphone business. Currently the hip-hop entrepreneur, whose real name is Andre Young, is ranked second on Forbes’ list of the wealthiest hip-hop artists of 2014. The sale of Beats Electronics would propel him past Sean “Puff Daddy” Combs.
Dr. Dre founded Beats Electronics with music producer Jimmy Iovine in 2008. Accruing a 65 percent share of the headphone market, the company’s value has soared above the $1 billion mark. The growth of the company has made it a commodity for a company like Apple, especially in terms of staying ahead of the game in an ever-changing music industry in terms of how music is shared and consumed.
With the purchase, Apple will acquire Beats’ streaming music service and its audio equipment business. The Beats management team will also report to Apple CEO Tim Cook. The proposed venture will be the sort of high-profile acquisition Apple’s previous CEO, the late Steve Jobs, would’ve avoided. The move by Cook and Apple is an attempt to refresh its coolness in regaining popularity for iTunes and the iPhone’s brand that has been lost to Samsung’s marketing campaigns. The move will also allow Apple to compete with Spotify and other music streaming services that offer unlimited subscription services.
According to Richard Lane, analyst at Moody’s, “In terms of acquisitions, Apple has been very, very light in their activity. I don’t think they’ve spent $1 billion in any of the last four years.” Cook has admitted to being on the “prowl” and out to make purchases that will improve the Apple brand overall. Acquiring Beats Electronics will definitely make a splash and it will also enshrine Dr. Dre into the billionaires boy club. Confirmation of the deal could be announced as early as next week.