Apple to buy Beats (by Dr. Dre) for $3.2B, Deal to be announced Next week

According to the Financial Times, Apple is in late-stage talks with Beats Electronics to acquire the music streaming and headphone maker for a deal worth $3.2 billion. The deal could be announced as soon as next week, according to the report. The report adds the senior management from Beats will report directly to Apple CEO Tim Cook. The Beats headphone brand has been marketed by artist Dr. Dre for several years, and the company most recently launched a cross-platform streaming music service that has seen some success. Bloomberg NewsThe Wall Street Journal, and The New York Times are all corroborating the report.

Apple is closing in on its largest ever acquisition with the planned $3.2bn purchase of Beats Electronics, the headphone maker and music streaming operator founded by music producer Jimmy Iovine and the hip-hop star Dr Dre. The deal could be announced as early as next week, people familiar with the negotiations said, but they cautioned that some details had yet to be agreed and talks could still fall apart.

The potential $3.2 billion deal would mark Apple’s largest acquisition of another company ever, and would be a stark contrast from Apple’s former reluctance to making large acquisitions, and would also give Apple full control of the brand that’s made gigantic flashy headphones the trendiest thing to hit kids’ heads since backward baseball caps. Apple CEO Tim Cook recently said that Apple is on the “prowl” for more deals, and this Beats acquisition would certainly prove that…

Beats has become a musical juggernaut since launching in 2008 with a line of premium headphones endorsed by Dr. Dre. The company followed up with a number of other celeb-endorsed personal audio accessories and headphones before launching its well-reviewed music-streaming service in January 2014. Apple’s acquisition of Beats could also bring up some conflicts of interest because the audio giant has deals to put audio gear in HP laptops and HTC smartphones.

Beats would provide Apple with experience in designing headphones, wearable devices, audio technologies, and importantly, streaming music technology as Apple moves to re-position iTunes in a world where competitors like Spotify and Pandora are growing at rapid paces.

A mockup of Tim Cook and Eddy Cue with Iovine
A mockup of Tim Cook and Eddy Cue with Jimmy Iovine by 9to5Mac

This partnership certainly does not come out of nowhere. Apple executives Tim Cook and Eddy Cue have previously met with Iovine to discuss streaming music services and Apple and Beats have partnered up to sell Beats earphone products in Apple Retail stores. Iovine has even told interesting stories about Apple and Steve Jobs.

The New York Post gives a little more detail about the rumored deal, reporting that Iovine will be joining Apple’s executive team as a “special adviser to Tim Cook on creative matters,” according to the Post’s sources.

If you ask me, Beats’ high-priced headphones fitting in perfectly with Apple’s business model. And with a flashy streaming-music app in tow, maybe Beats could provide the injection of fun and youthfulness Apple needs to revitalize its Music app and audio accessories.

Apple’s first head of design, Bob Brunner, could be coming back to the company as part of the acquisition as well. If the purchase pans out, it would be eight times larger than Apple’s $400 million acquisition of NeXT Software, which brought Steve Jobs back into the fold in 1996.


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Shaminder Pal Singh

I am a student by day and tech blogger by night. I try to bring to the public the latest and greatest news from the tech world!

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