28 May 2014

Apple Confirms it's Buying Beats for $3 Billion

Apple has just confirmed plans to purchase Beats Electronics for $3 billion. The acquisition ranks as the largest that Apple has ever made and will see it take ownership of an enormously successful and profitable line of consumer headphones as well as a burgeoning subscription music service. Beats co-founders Jimmy Iovine and Dr. Dre will also join Apple as part of the acquisition, which it will pay for with $2.6 billion in cash and $400 million in stock.

Iovine and Dre will work with Apple on its future music offerings. "They’re going to be coming up with [features] that blow your mind," Apple CEO Tim Cook tells The New York Times, "and products you haven’t thought of yet, and seeing around the next corner to articulate the way to take music to an even higher level than it is now."

The two companies will remain separate and even continue to offer casually competing services, including iTunes Radio and the recently launched Beats Music subscription service. Apple says that Beats' focus on music is complementary to its own, though it hasn't gone into detail on how it'll manage or integrate this first big acquisition. Though this is a relatively huge purchase for Apple — which usually only buys smaller companies — the cost is far less meaningful to it thanks to its sizable stockpile of cash.

Read the full story at The Verge.

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