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Apple officially buys Beats for $3B; Iovine, Dr. Dre to make leap

updated 05:02 pm EDT, Wed May 28, 2014

Beats co-founders to take unannounced Apple jobs

Following weeks of rumors, Apple has confirmed plans to buy Beats Electronics in a deal worth $3 billion. That figure includes an upfront payout of $2.6 billion, and a remaining $400 million that will vest over time. The purchase includes Beats' hardware and streaming music divisions, and co-founders Jimmy Iovine and Dr. Dre (Andre Young) will join Apple in unspecified job roles.

In explaining the motivation for the deal, Apple CEO Tim Cook states only that he and the company "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." A prepared statement from Iovine claims that he has "always known in my heart that Beats belonged with Apple," and that "the idea when we started the company was inspired by Apple's unmatched ability to marry culture and technology."

Cook's statements may support the notion that Apple is interested in Beats Music. Although the service has faired relatively poorly so far, Apple may want to transform its own iTunes Radio into a full-fledged streaming subscription service, given that sales of iTunes music downloads are continuing to shrink. It will also presumably absorb Beats' headphone and speaker products, since they continue to sell well, and could serve as the basis for improved audio in Macs, iPhones, iPads, and iPods.



By Electronista Staff
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  1. YangZone

    Fresh-Faced Recruit

    Joined: 05-24-00

    Mr Cook is ok with the company Mr Young after what happened between Mr Young and Ms Dee Barnes. Staring at a toilet.

  1. elroth

    Junior Member

    Joined: 07-05-06

    "It will also presumably absorb Beats' headphone and speaker products, since they continue to sell well, and could serve as the basis for improved audio in Macs, iPhones, iPads, and iPods."

    Are you kidding me? Beats headphones and speakers sound like bass-heavy, muddy crap. Keep the outer design if you want, but totally redo the sound engineering, or this deal will really stink.

  1. Jeronimo2000

    Forum Regular

    Joined: 08-20-01

    Wow. So I guess I have to start accepting this as a fact and wonder what's the greater scheme of things behind this... maybe they'll spill some additional beans next Monday.

  1. YangZone

    Fresh-Faced Recruit

    Joined: 05-24-00

    @elroth Exactly; Apple should have added Sennheiser to the shopping cart for that part of the deal to make any sense.

  1. shawnde

    Fresh-Faced Recruit

    Joined: 04-01-08

    Apple's own sound gear always sounds way better than most of this crap in the stores. Apple's iPod HiFi was a marvel for sound (too bad it's been discontinued).

    I still believe this deal doesn't make ANY SENSE for Apple. I believe this was a total song and dance job by the M&A bankers on Wall Street, and Jimmy Iovine. $3 Billion is WAY TOO MUCH money for this; I was thinking maybe $150 Million. They don't have any patents or protectable portfolio .... what's in there? Just a bunch of chinese made second rate electronics, plus a streaming license? that's hardly worth $3B. I think Apple got hosed on this deal.

  1. DiabloConQueso

    Fresh-Faced Recruit

    Joined: 06-11-08

    $150 million? That's how much you'd offer to buy out a company that did $1.5 BILLION in revenue last year?

    Sorry to say, I don't think you know the first thing about what you're talking about.

  1. coffeetime

    Mac Enthusiast

    Joined: 11-15-06

    Well, since now the deal is done. Next move: Migrate the entire music part of iTunes to Beats. No app sync, calendar sync and all other "me too" syncs. Just 100% music sync and management on the new Apple Beats. Second, chop up iTunes into iApp, iTheater, and iData. Third, kill iTunes (the legacy iPod Sync software).

    And also iPhoto, iBook, and iWhatever should be directly sync with your iDevices.... not going through iTunes! Hello, Apple?

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