Apple Inc. may soon acquire Beats Electronics – one of the leading producers of headphones – in a deal which could be valued at as much as $3.2 billion USD, according to various reports by the media.
If the deal goes ahead it will be the largest acquisition ever made by Apple Inc.
The move would significantly boost Apple’s foothold in the music accessories and music streaming industry.
Beats, which was founded by the hip-hop producer Andre “Dr. Dre” Young and Interscope-Geffen-A&M Records chairman Jimmy Iovine, has a huge market share for headphones priced higher than $100.
The company also runs subscription-based music streaming service: “Beats Music”.
Update May 29th, 2014: Apple confirms it is to acquire Beats. Apple will pay $2.6 billion initially plus $400 million that will be “vested over time”. Dr. Dre and Jimmy Iovine, the two Beats co-founders, will become part of the tech giant’s team.
Apple making an entrance into subscription streaming services?
There is significant growth in the streaming music business – which Apple doesn’t currently have a strong position in.
With over 800 million iTunes accounts (most linked to credit card details), the acquisition would allow Apple to make a music streaming service available to purchase via an Apple account on the iStore.
In 2011 Dre made a comparison between his company and Apple, saying:
“We’re trying to eventually be second to Apple. And I don’t think that’s a bad position.”
Tim Cooks (CEO of apple) met with Jimmy Iovine (CEO of Beats) last year in an attempt to create a partnership with Beats’ planned music-streaming service.