Apple's rumored purchase of audio electronics maker and music streaming providers Beats for $3 billion has now been confirmed by both parties.
Google Unveils Self-Driving Car With No Steering Wheel
The Wall Street Journal reports the acquisition, which will be Apple's largest ever. The rumor has been running for weeks, with talks said to be at an advanced stage earlier this month. In Beats Electronics, Apple will not only be getting the popular Beats by Dre headphones, but the company's Beats Musis streaming service and music industry connections.
Rap star Dr. Dre and Beats co-founder Jimmy Iovine will join Apple, giving the company a cool factor and helping combat the swarm of competing services such as Spotify and Pandora. Sony Music Entertainment Chief Executive Doug Morris, formerly Iovine's boss at Universal Music, said that Mr. Iovine's feel for "the culture of young people" with Apple's "many millions of young peoples' credit cards" will achieve this cool new image.
Iranian Court Orders Mark Zuckerberg To Appear Over Privacy Violations Via Instagram And WhatsApp
Rather than continue to build the Apple brand as the company normally does, Beats will continue to use its own name, presumably seeking to capitalize on the already iconic and popular Beats brand. The sale of music singles was down last year, with album downloads staying where they are against the tide of free streaming music.
"We think these guys have a very rare talent," Apple CEO Tim Cook said of Mr. Iovine and Dr. Dre. "We love the subscription service that they built--we think it's the first subscription service that really got it right."
Iovine stated that Apple approached them to buy the company two months ago, and even though he had worked closely with Apple for years, was shocked by the offer. According to the WSJ, Mr. Iovine said he will leave his post as chairman of Vivendi Interscope Records and will work full-time at Apple. Dr. Dre said he will continue to produce music, but do "as much as it takes" for Apple.
