Earlier this month, reports emerged claiming that Apple was in talks to buy headphone and music streaming company Beats for $3.2 billion, making it Apple’s largest deal in history. According to a new report out of the NY Post, Apple has recently dropped the price its willing to pay for the company to $3 billion. It’s unclear as to why Apple lowered its offer, but a report last week by Billboard cited a variety of reasons as to why the deal could be delayed.
One of the reasons was a vulgar video from Dr. Dre(below), that apparently “freaked” Apple out.
Citing unnamed sources acquainted with the ongoing discussions between Cupertino and Beats, The New York Post says that Apple has lowered its offer for Beats to just $3 billion, citing “due diligence” as a key factor. When the original $3.2 billion number was leaked, the company had not yet done any of that, and since it started, it has apparently dug up some unsettling information.
The New York Post’s source says that Apple is not after Beats’ music streaming service rather the hardware business.
“Apple doesn’t have a streaming music business so it would be a nice instant get, but the hardware is the profitable business,” they said.
The NY Post report goes on to say that Apple’s acquisition of Beats could be announced as early as this week. Although previous rumours have suggested that the deal is a sort of acqui-hire of Beats cofounders Dr. Dre and Jimmy Iovine expected to join Apple as executives following the acquisition, The New York Post suggests Apple’s major interest is the Beats brand itself: it’s a billion dollar hardware business with major fashion appeal, exactly the kind of business Apple tries to create for itself.. The two will also reportedly during Apple’s keynote.
Seeing that this newest report claims that the deal will be announced next week, and earlier reports stated that be at WWDC next week and appear on stage, it looks like we finally may be nearing an official announcement regarding the acquisition.
If the deal goes through, Iovine and Dre are expected to be at Apple’s Worldwide Developer’s Conference on June 2 significantly richer: Dre will earn $750 million on the deal, pre-tax, while Iovine is expected to earn hundreds of millions himself.