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Value of Apple's Beats buyout value allegedly drops to $3 billion

updated 10:02 am EDT, Wed May 28, 2014

Deal could be announced by end of week

Apple has lowered its asking price for Beats Electronics to $3 billion, but is in a position to announce a deal by the end of the week, according to sources for the New York Post. The original $3.2 billion figure is said to have been touted prematurely. "Apple hadn't even begun its due diligence process when news of the number came out," one source is quoted as saying.

The sources claim that despite reports to the contrary, Apple is more interested in Beats' headphones and speakers than in Beats Music. It's been speculated that Apple intends to use the Music platform to improve iTunes Radio. "Apple doesn't have a streaming music business so it would be a nice instant get, but the hardware is the profitable business," one source comments.

The Post estimates that Beats co-founders Jimmy Iovine (pictured) and Dr. Dre (Andre Young) will each receive hundreds of millions for the buyout, while key stakeholder Universal Music will receive over $400 million. Despite his video celebration, Dre will likely not become a billionaire in the near future; even if he pockets a predicted $750 million, that will only add to the $275 million he's earned in the past three years, and doesn't account for taxes.

Finally the sources add that Iovine and Dre will indeed attend Apple's WWDC keynote on June 2nd. Whether any products will be announced in connection, though, is unmentioned.

By Electronista Staff
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  1. coffeetime

    Senior User

    Joined: 11-15-06

    I still think it's a waste of money buying Beats. The history of Apple maintaining hardware accessories business is just NOT convincing. Please take that $3 billion and do something more useful..... like headless iMac (the missing link between Mac Mini and Mac Pro).

  1. coffeetime

    Senior User

    Joined: 11-15-06

    Somewhat unrelated: I also think Apple needs to reThink iTunes outside the box. Right now iTunes is giant chunk of bloatware that people are avoiding to use. This means music will go down altogether with the mothership if all things fail. Split them (as an option) so that each mini hub is more manageable on the user end.

  1. climacs

    Mac Enthusiast

    Joined: 09-06-01

    coffeetime, stop thinking about Beats headphones and start thinking about the people running the company.

    Yes, it would be nice to get much better earbuds or headphones for iPhone and iPad, but really this deal is mostly about putting two of the savviest, most influential figures in the music business on Apple's team.

    And yes that includes rethinking iTunes.

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