Beats Breakdown: Apple Paying $2.5B for Beats Electronics, $500M for Beats Music

Apple yesterday announced plans to acquire both Beats Electronics and Beats Music for a combined total of $3 billion, but a new report from The Wall Street Journal breaks those numbers down further.

As it turns out, Apple is paying slightly less than $500 million for the Beats Music streaming service, with the bulk of the money ($2.5B) going towards the purchase of Beats Electronics, which includes the company's popular line of headphones and speakers.

applebeats
At yesterday's Code Conference, Beats co-founder Jimmy Iovine revealed that the service has 250,000 subscribers in the United States, a small number compared to Spotify's 10 million worldwide listeners. Beats Music's relatively modest size explains why it was so much cheaper than the company's Electronics division, which pulled in $1.5 billion in sales in 2013 according to a source that spoke to The Wall Street Journal.

Leveraging iTunes and iTunes Radio, Apple may be able to grow Beats Music significantly in the coming months. Apple's existing streaming music service, iTunes Radio, has a total of 40 million listeners and via iTunes, Apple has sold 35 billion songs. The company also has more than 800 million iTunes accounts, most with credit cards attached, along with a wealth of data on customer listening habits.

"We think all of those things, when you put them all together, it's on steroids with us together," said iTunes Chief Eddy Cue.

Under the terms of the deal, Beats co-founders Jimmy Iovine and Dr. Dre will both be joining Apple to work under Cue, while marketing head Phil Schiller will oversee the Beats headphone business. Apple CEO Tim Cook has called Iovine and Dre's talent and skills "really unique" and "very hard to find." He also stated that Apple felt Beats Music was the first music service to "get it right" through the use of human curation.

Following regulatory approval, Apple's purchase of Beats is expected to close during the fiscal fourth quarter.

Top Rated Comments

proline Avatar
88 months ago
Somehow I feel this marriage isn't going to last.
Score: 19 Votes (Like | Disagree)
iSteve-O Avatar
88 months ago
Doubters are proven wrong once again. Congrats Dre! :apple:

Score: 14 Votes (Like | Disagree)
Four oF NINE Avatar
88 months ago
So much for all the comments (too numerous to list) about how

"Dude, it's NOT about the headphones!"
Score: 13 Votes (Like | Disagree)
MH01 Avatar
88 months ago
It was the hardware.

Kudos Beats, you just found the richest sucker to purchase your overpriced headphones, and the silly suckers are smiling like they got a good deal :)

And most of well played Dr Dre , YOUR mega rich! And damn lucky cook is running the show.

So apple bought a headphone company that is renowned for having poor sound quality. Given apple in house headphones are nothing to call home about, they are basically not going to improve the sound quality going forward as a result of this spend.

I hope this is not a stupid attempt to be cooler than Samsung ...... Given how much money Samsung is throwing into marketing .
Score: 12 Votes (Like | Disagree)
Kariya Avatar
88 months ago
These prices are based on individual valuations not on what Apple 'wanted'. Beats Electronics is far more valuable than Beats Music.
Score: 9 Votes (Like | Disagree)
ghsNick Avatar
88 months ago
Looks like it WAS for the hardware then.
Score: 9 Votes (Like | Disagree)

Top Stories

apple transfer google photos 1

Apple Launches Service for Transferring iCloud Photos and Videos to Google Photos

Wednesday March 3, 2021 12:04 pm PST by
Apple this week introduced a new service that's designed to make it quick and easy for iCloud users to transfer their stored photos and videos to Google Photos. As outlined in an Apple support document, you can go to Apple's privacy website and sign in to see the "Transfer a copy of your data" option. If you select this and go through all the steps, Apple will transfer your iCloud photos and ...
PIA23764 RoverNamePlateonMars web

NASA Mars Perseverance Rover Uses Same PowerPC Chipset Found in 1998 G3 iMac

Tuesday March 2, 2021 3:21 am PST by
NASA's Perseverance rover, which recently made history landing on the surface of Mars, is powered by the same processor used in an iMac more than 23 years old. Image Credit: NASA As reported by NewScientist (via Gizmodo), the rover includes the PowerPC 750 processor, the same chip used in the G3 iMac in 1998. The main chipset is the same; however, there are differences between the...
rosetta 2

Rosetta May Be Removed From M1 Macs in Some Regions on macOS 11.3

Tuesday March 2, 2021 5:20 pm PST by
Installing the upcoming macOS 11.3 software update on an M1 Mac may result in Rosetta 2 being removed in one or more regions around the world. In the third beta of macOS 11.3 seeded to developers for testing today, MacRumors contributor Steve Moser uncovered new strings in the beta's code indicating that "Rosetta will be removed upon installing this update." Another new string reads "Rosetta ...
iphone 6 in hand

Apple Faces Another iPhone Lawsuit Over 'Programmed Obsolescence'

Monday March 1, 2021 6:44 am PST by
Apple faces a new class-action lawsuit that accuses it of deliberately releasing iOS updates that slowly reduce the performance of an iPhone, forcing customers to upgrade their devices. The lawsuit comes from the Portuguese Consumer Protection Agency, Deco Proteste (via Marketeer), which in a statement says that it will proceed with a case against the Cupertino tech giant because it...
magsafe charging brick feature

Prosser: iPhone 12 MagSafe Battery Pack to Feature Reverse Charging

Monday March 1, 2021 1:18 pm PST by
Apple is working on MagSafe-compatible battery packs that will be compatible with the iPhone 12 models, and leaker Jon Prosser today said on the Genius Bar podcast that one version of the battery pack will feature "reverse charging." According to Prosser, Apple is working on two versions of the battery packs, one that's a standard version and one that's a premium version with reverse...
Screen Shot 2021 03 03 at 11

MagSafe Charging Port for iPhone Appears in Apple Patent

Wednesday March 3, 2021 1:30 am PST by
In a newly granted patent, Apple envisions a type of connectivity port using an iteration of its magnetic MagSafe charger to charge an iPhone, potentially paving the way for a future without Lightning. Submitted to the United States Patent and Trademark Office on Tuesday (via Patently Apple), the patent outlines a three-pinned MagSafe charger, similar to the ones found in older MacBook...
Apple Prefer Lightning Over USB C Feature

iPhone Sticking With Lightning Port Over USB-C for 'Foreseeable Future'

Tuesday March 2, 2021 9:32 am PST by
Apple will retain the Lightning connector on the iPhone for the "foreseeable future," with no intention of switching to USB-C, according to reliable analyst Ming-Chi Kuo. In spite of much of the industry moving toward USB-C, Apple will not be using it to replace the Lightning connector on the iPhone 13, or indeed on any iPhone model for the time being. In a note seen by MacRumors yesterday,...
iPad mini pro feature

Sketchy Rumor Claims 'iPad Mini Pro' Launching in Second Half of 2021

Wednesday March 3, 2021 3:04 am PST by
Apple is expected to launch a sixth-generation iPad mini in the first half of 2021, possibly as soon as this March, based on long-standing rumors. However, a new rumor out of Asia that has gained traction in the last 24 hours suggests an "iPad mini Pro" will arrive in the second half of this year. According to a post on Korean blog Naver, whose rumor track record is unknown, the device...
apple pencil 3 leak

New Apple Pencil Allegedly Leaks With Glossy Finish and Redesigned Tip

Wednesday March 3, 2021 6:17 am PST by
Images supposedly depicting a third-generation Apple Pencil have been shared on Twitter by the leaker known as "Mr. White." The purported new Apple Pencil appears to share a very similar design to the current, second-generation Apple Pencil, which is shorter than the previous version and charges inductively on the side of an iPad. The updated Apple Pencil appears to have a glossy...
apple watch ecg wrist

Apple Watch ECG Feature Gets Approved in Australia

Wednesday March 3, 2021 2:07 am PST by
The Australian government has approved ECG functionality on the Apple Watch, giving Apple the all-clear to launch the feature for Apple Watch users in the country, according to a regulatory document first spotted by The 8-Bit. Earlier last month, the Apple Watch's irregular heart rhythm notification received approval in Australia, although ECG did not. Irregular heart rhythm is a feature...