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Apple confirms acquisition of Beats for US$3 billion

by Mark Tyson on 29 May 2014, 11:15

Tags: Apple (NASDAQ:AAPL), Beats Electronics

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After all the rumours that have been circulating for weeks, saying that Apple is in talks to acquire Beats, the deal between the two companies has at last been made official. Apple has now confirmed that it will be acquiring the headphone maker and music-streaming service provider for a total of $3 billion (£1.8 billion).

The deal will see Beats Electronics' co-founder hip-hop star Dr. Dre and music producer Jimmy Iovine join the technology firm's electronics and music-streaming divisions. The pair will become part of Apple with the titles "Dre" and "Jimmy".

"I’ve always known in my heart that Beats belonged with Apple," said Iovine, who was a long-time friend of Apple's Steve Jobs and thus has a prior relationship with Apple. "The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special."

Apple said in its statement that it will be paying an initial $2.6 billion (£1.6 billion) for Beats, and another $400 million (£239 million) "that will vest over time."

"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," said Apple CEO Tim Cook in a statement. He went on to point out that the deal will allow Apple to "continue to create the most innovative music products and services in the world." We must remember that this deal is about both the Beats music accessories and the Beats Music streaming service which will provide Apple with "a head start," in music streaming subscriptions, said Tim Cook.

Said to be the biggest-ever acquisition by Apple, easily surpassing Apple's $400 million acquisition of Steve Jobs' NeXT Software Inc. in 1977, the deal is expected to complete by Q4 2014, assuming it clears regulatory approval. A rare move by Apple at this stage is the announcement that it will continue to use the Beats brand, since the company has nearly always focused on its Apple branding.



HEXUS Forums :: 11 Comments

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It's a marriage, a synergy made in a heaven. Both make market leading high end equipment which is always top of class and in no way over priced and sold to utter morons who think that they are creative.
TheAnimus
It's a marriage, a synergy made in a heaven. Both make market leading high end equipment which is always top of class and in no way over priced and sold to utter morons who think that they are creative.

I hear you…

XD

Also, what audio gear does everyone use?

On the go I use my sennheiser HD439's. At home I use an Objective2+ pushing some sennheiser HD555's ( I inherited these from my older brother, nice guy)
“I’ve always known in my heart that Beats belonged with Apple,” said Iovine, who was a long-time friend of Apple's Steve Jobs and thus has a prior relationship with Apple. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”
Don't know how he managed to say that lot with a straight face. :puke:
A rare move by Apple at this stage is the announcement that it will continue to use the Beats brand, since the company has nearly always focused on its Apple branding.
Erm, I thought a big part of this deal was that the Beats brand has a lot of recognition. So ditching that would surely be a real bone-headed move. Being catty, if you ditch the brand then what's left of value - pretty much Dr Dre's celebrity endorsement alone…

I suppose to the hardcore Apple and Beats fans this is a big deal. Personally, I'm not bothered either way - I would have been a LOT more impressed if Apple had bought Wolfson Microelectronics.
Jowsey
Also, what audio gear does everyone use?

On the go I use my sennheiser HD439's. At home I use an Objective2+ pushing some sennheiser HD555's ( I inherited these from my older brother, nice guy)
Shure SE535's (B grade stock) or the active noise-cancelling set that came bundled with my Sony A845 player when out and about. Beyerdyamic DT660's+Fiio E18 when I'm in “contemplative” mood - the 660's came as part of a trade-in deal. And Audica MPS-1 (B-grade stock) desktop set for something to listen to when I'm working (might not have the top of the line audio performance, but it's good enough and the charger port and multiple inputs are a god-send).

Might treat myself to some Sennheiser gear (HD600?) when the 660's start to really annoy me. The bass on them is good, so quite suitable for the “music” I tend to listen to. No particular desire to pay over the odds for the Beats name - not caring how “funk-kay” they look, preferring to spend my hard earned on sound quality.
I'd like to thank Apple for giving me the first belly laugh of my birthday. If only all presents were this good!
Apple’s deep commitment to part music fans from their money, …

FTFY ;)

I guess this kind of makes sense for Apple - the branding and target demographic is just about right, and now they can sell “Beats” bundles to bump up the margin on their products even further. Not sure I've ever even tested a set of Beats headphones, and I've certainly never bought one. I can't see that changing just because they're owned by Apple… ;)