Apple Impressed by Beats' Ability to Attract Paid Subscribers, Likely to Keep Brand Separate

beatsMusic industry veteran Jimmy Iovine is believed to be the primary target in Apple's rumored acquisition of Beats Electronics, but the company also is eyeing Beats' streaming music service and the Beats branded headphone business, reports Bloomberg. Apple likely will assume leadership of the company, but keep the Beats brand independent.

Beats co-founder Iovine previously pitched the idea of a streaming music service to both Steve Jobs and Tim Cook, but neither party showed interest until the streaming music service launched earlier this year.

Apple became interested in doing a deal with Beats after executives were impressed by Beats Music, an online music streaming service unveiled earlier this year, which was rapidly converting users into paying subscribers, said a person with knowledge of the talks, who asked not to be identified because the discussions are private.

Beats Music could fill a gap in Apple's music portfolio, which now offers digital downloads via iTunes and iTunes Radio, a channel-based music streaming service akin to Pandora. Though still a leader in the music download arena, iTunes is losing ground to full-library streaming music services like Spotify, which is poised to overtake iTunes as Europe's largest online digital music service.

Besides the music service, Apple also will obtain a high-margin headphone business co-founded by rap musician Dr. Dre, Iovine, and early partner Monster cable. As part of the acquisition, Beats will likely remain an independent brand with Apple providing design improvements for future Beats products.

Both Iovine and Dre may take on senior roles at Apple following Apple's acquisition, remaining at Beats' Los Angeles headquarters and traveling to Cupertino when necessary. Iovine is expected to leave his role as chairman of Interscope Geffen A&M records and use his music industry experience to help Apple secure future deals with music labels.

Top Rated Comments

losthorse Avatar
101 months ago
-- removed by user --
Score: 41 Votes (Like | Disagree)
cmChimera Avatar
101 months ago
"We can't innovate anymore... let's just buy the first thing that celebrities endorse."

-Tim

You're sooo funny and original.
Score: 20 Votes (Like | Disagree)
chriscrk Avatar
101 months ago
If people think this acquisition is stupid just because they don't like the headphone quality, they fail to realise the bigger picture, and they are real bozos.
Score: 17 Votes (Like | Disagree)
WinstonRumfoord Avatar
101 months ago
So...

Firefox/John Q Public effectively ousted it's CEO for donating $500 to a cause against gay marriage.

I wonder what Apple, a historically progressive company will do about Dr. Dre making millions glorifying homophobia and misogyny?

"Long as my mother****ing pockets was fat
I didn't give a **** where the bitch was at
But she was hangin' with a white bitch doin' the **** she do
Suckin' on his dick just to get a buck or two"

Just food for thought...
Score: 14 Votes (Like | Disagree)
trife Avatar
101 months ago
I'm happy for all you Apple doomsday prophets--you can relax now.

All you undercover (and also overt) bigots can still kick rocks though.

And to all the aforementioned groups, see you at the iPhone 6 launch.
Score: 10 Votes (Like | Disagree)
bighype Avatar
101 months ago
"We can't innovate anymore... let's just buy the first thing that celebrities endorse."

-Tim
Google buys advanced AI and robotics, Facebook buys AI and communications… and Apple buys fashion accessories for urban kids.

Apple Maps still suck, Siri is still a gimmick and yet Apple spend billions on BS instead of on improving these core products.

Tim Cook's an idiot. He's the next Ballmer.
Score: 7 Votes (Like | Disagree)

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