Apple in Talks to Acquire Beats Electronics for $3.2 Billion [Updated]

Apple is said to be close to completing an acquisition of Beats Electronics, the headphone company and streaming music service created by Dr. Dre and Jimmy Iovine. According to the Financial Times, the deal could be announced as soon as next week if negotiations work out.

beatsbydre

Apple will acquire Beats' streaming music service, which launched this year, and its audio equipment business, which includes its brand of headphones and audio equipment. The Beats management team will report to Mr Cook, said people familiar with the deal. Apple and Beats declined to comment.

Apple is said to be paying $3.2 billion dollars for the company, a sum that dwarfs the $404 million Apple spent to acquire NeXT in 1996, its largest purchase to date. As of its last earnings call, Apple had some $150 billion in cash on hand, plenty to cover the large acquisition.

Tim Cook said earlier this year that the company was open to making large acquisitions if the purchases made sense. "We have no problem spending 10 figures for the right company, for the right fit that's in the best interest of Apple in the long-term. None. Zero."

In addition to producing a range of popular premium headphones and speakers that Apple currently sells in its stores, Beats also recently launched its Beats Music service, a direct competitor to Spotify, Pandora, and Apple's own iTunes Radio service. Beats Music is, however, a subscription-based on-demand service, which could bolster Apple's free station-based iTunes Radio service.

The purchase of Beats Electronics comes as Apple has been rumored to be working on a complete overhaul of iTunes in order to address declining music sales. Part of Apple's revamp was said to include an on-demand streaming music service similar to Spotify, but the company may have elected to purchase Beats rather than designing its own service from the ground up.

Beats Music, which is available to subscribers for $9.99 per month, focuses heavily on curation. The company has hired music experts from popular radio stations around the country to create stations and playlists from the service's 20 million song catalog. It is unclear if Apple will keep the Beats Music format intact if it does indeed acquire the company, but the curation will fit well with the iTunes Music Store, which also offers music choices picked by Apple editors.

Apple and Beats Electronics have had an ongoing relationship, with Beats CEO Jimmy Iovine meeting with Tim Cook and other Apple executives about a possible partnership back in January of 2013. Iovine also reportedly pitched Steve Jobs on a streaming music service a decade ago, but Jobs passed on the opportunity.

According to the Financial Times, the deal is still in the works with some details yet to be ironed out, suggesting "talks could still fall apart."

Update May 8 3:30 PM PT: Bloomberg, The Wall Street Journal, and The New York Times have confirmed that Apple is in talks with Beats Electronics over a possible acquisition.

Update May 9 4:24 AM PT: A new video on Facebook (warning: NSFW language) posted by actor Tyrese Gibson (via The Next Web) shows Beats Electronics founder and musician Dr. Dre seemingly confirming the acquisition, however Apple and Beats Electronics have yet to speak on the potential purchase.

Update May 9 5:08 AM PT: The video featuring Dr. Dre seemingly confirming the acquisition has been pulled from Facebook, however it has since been reuploaded to YouTube by another source.

Top Rated Comments

Broph Avatar
123 months ago
Am I the only one that's totally surprised by this? Seems pretty random. And pointless IMO.
Score: 94 Votes (Like | Disagree)
moeafg Avatar
123 months ago
Why? Beats is terrible at audio. If it was Bose/Bowers & Wilkins then I wouldn't be so surprised.
Score: 82 Votes (Like | Disagree)
XboxMySocks Avatar
123 months ago
Why? Beats is terrible at audio. If it was Bose/Bowers & Wilkins then I wouldn't be so surprised.

Bose is not much better than Beats are :s
Score: 71 Votes (Like | Disagree)
timbloom Avatar
123 months ago
Oh, please, no.

Worthless acquisition.
Score: 53 Votes (Like | Disagree)
Sunday Ironfoot Avatar
123 months ago
Beats by Dr Cook
Score: 52 Votes (Like | Disagree)
moeafg Avatar
123 months ago
Bose is not much better than Beats are :s

Bose is a billion times better than Beats
Score: 47 Votes (Like | Disagree)

Popular Stories

iPhone 16 Mock Header With Dynamic Island

Skipping the iPhone 15 Pro? Here's What's Rumored for iPhone 16 Pro

Friday September 22, 2023 9:29 am PDT by
Are you skipping the iPhone 15 Pro and waiting another year to upgrade? If so, we already have some iPhone 16 Pro rumors for you. Below, we recap new features rumored for the iPhone 16 Pro models so far:Larger displays: The iPhone 16 Pro and iPhone 16 Pro Max will be equipped with larger 6.3-inch and 6.9-inch displays, respectively, according to Ross Young, CEO of Display Supply Chain...
Update Your iPhone 15 to iOS 17

Warning: Update Your iPhone 15 to iOS 17.0.2 Before Transferring Data From Another iPhone

Friday September 22, 2023 6:36 am PDT by
If you are unboxing an iPhone 15, iPhone 15 Plus, iPhone 15 Pro, or iPhone 15 Pro Max today, make sure to update the device to iOS 17.0.2 before transferring data to the device from another iPhone, or else you might encounter issues. iOS 17.0.2 is only available for the iPhone 15 lineup. Apple says the update fixes an issue that may prevent transferring data directly from another iPhone...
iOS 17

Apple Releases iOS 17.0.1 and iPadOS 17.0.1 With Bug Fixes, Plus iOS 17.0.2 for iPhone 15 Models

Thursday September 21, 2023 10:28 am PDT by
Apple today released iOS 17.0.1 and iPadOS 17.0.1 updates for the iPhone and the iPad, adding bug fixes to the new software. The iOS 17.0.1 and iPadOS 17.0.1 updates come just a few days after Apple launched iOS 17 and iPadOS 17. The software, which is build 21A340, can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General > Software Update. There is a...
Apple Watch Ultra 2 double tap gesture 230912

watchOS 10.1 to Enable Apple Watch's New 'Double Tap' Gesture

Thursday September 21, 2023 12:52 pm PDT by
The new Double Tap gesture for the Apple Watch Series 9 and the Apple Watch Ultra 2 will be enabled starting with watchOS 10.1, according to Marques Brownlee, host of the popular tech-focused YouTube channel MKBHD. The first beta of watchOS 10.1 will likely be available by next week, and Apple announced that the software update will be released next month. Brownlee shared his impressions...