Beats Music

Apple to reportedly acquire Beats for $3.2 billion

According to a report from the Financial Times, Apple is planning to announce an acquisition of well-known music company Beats for $3.2 billion as early as next week. Beats, well known for their high-priced but mid-range headphones, other audio accessories and now a streaming music service, is no stranger to tie-ups with other technology makers, including HTC. FT reports that the Beats staff will report directly to Apple CEO Tim Cook following the acquisition.

Talks between the two companies are still ongoing, and details have yet to be finalized on the potential purchase. As is always the case with these sorts of deals, they could fall apart if everything isn't settled with both sides coming away happy. If completed, this would be Apple's largest ever company acquisition, and the synergies offered to Apple by acquiring a music company are obvious.

Source: Financial Times; Via: 9to5Mac

Andrew Martonik

Economist. Android Central editor. Let's talk about mobile things.

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There are 50 comments. Add yours.

counterculture says:

Hmmm.. I HATE Beats Hardware - think both myself and Allyson are strong supporters of Bose ;) - but I could see the headphones that Apple includes with devices (namely the iPhone) getting a huge benefit from this acquisition (if truer obviously). Would love to see what this means for Apple but really interested to see if the curation that the Beats Music app makes it's way into iTunes Radio and design elements are implemented in the Music app and iTunes on the Mac. Personally, I think they both need a huge overhaul, not just a fresh coat of paint as Rene puts it.

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willizen says:

careful, the tech geeks aren't big fans of Bose either

wgfinley says:

Come on, Bose is the best, their marketing tells you so! The rest of us like flat response across the entire frequency range.

Nathan Bael says:

I have always felt beats was a ripoff. Basically you are paying for an equalizer preset. Bose is ok, but I still prefer my klipsch earbuds.

wormeyman says:

Any thoughts on WHY Apple would want to buy them?

iSRS says:

This could be how "iTunes" expands to other platforms like android

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d ha says:

I was trying to figure why?
And I think you nailed..
Beats subscription was nothing worth buying, but wight he radio and head phones, there the control of the GEM.
Good catch.
The kind of play like with iTunes and the iPod.

machzk says:

I think it has a lot more to do with the streaming service than the headsets. Spotify, Rdio & company be damned.

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joshrocker says:

Agree, this is probably more about their struggling streaming service then anything else.

willizen says:

don't discount the hardware end of this. Beats headphones are hugely popular, and though they are overpriced, the new versions have gotten much better marks for their audio quality. And they are very stylish (probably why they are so hugely popular)

Derrick4Real says:

far as i know they make monumentally more off the headphones and the streaming service is struggling for subscribers.

richard451 says:

hmm.. You get Iovine, Dre and Reznor running iTunes (kick Cue to the curb after how he has conducted himself). Every single athlete and music star seems to wear beats headphones, so Apple gets big jump in free marketing. You put more of a stanglehold on the kids market since beats seems to be popular with the younger crowd. You may be able to get something from the streaming service (though I suspect Apple may shut it down).

That said, none of those come close to being worth 3.2b dollars and I doubt Apple will ever make that money back from Beats. Sadly, like everyone else, Apple overpaid for Beats. Good Job by Iovine.

Bluecanary says:

Seriously.. Beats headphones are terrible compared to other cans in the market in the same price range (i.e. Sennheisers).

Derrick4Real says:

Gotta wonder if it has the same appeal if it's Beats by Apple. I don't think it does personally.

d ha says:

As ISRI note above, Apple with control every Android using "Beats" application, hardware, software, and radio contract.

Big Buy and BIG CONTROL over Android using.

A MICROSOFT power play.

Damn APPLE really made a GREAT acquisition.

Derrick4Real says:

very profitable hardware, headphones, speakers.

kravex says:

They didn't think they were overpriced enough?

iSRS says:

If true, what I would love to see is the Beats app becomes the new iTunes Radio app, iTunes Match users get the full access, and then the current beats apps on other platforms remains the same. Apple then is making money from all platforms, while offering a better/integrated solution on Apple platforms.

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Munale says:

If true, it would seem Apple has lost it's way

Chris Kerrigan says:

Hardly. If anything this shows that Apple recognizes an opportunity.

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Munale says:

Yeah an opportunity to buy an inferior hardware company and a third place content company

applejosh says:

Not sure how I feel about this. I don't have a particular fondness for the headphones/earbuds they offer, but I wonder if this would be more about acquiring the Beats Music rights and maybe the speakers included in phones. The HTC devices with "Beats Audio" have generally been rated as very good for audio. I don't know what makes these speakers "better" than those on other phones. Also not sure what intellectual property Beats also has, but that seems to be a common thing Apple goes after when it acquires companies.

Mac58 says:

Seeing as I am not really a apple user, I dont really want thisto happen. Choice allows users to 'choose' between beats music streaming service, google play, spotify, pandora, and itunes, if you have a iphone (and even more that I may have forgotten to list). If Apple uses this just to add hardware/software exclusivity to their products that would suck. Because then that choice would now be gone. If however they keep them operating as a separate entity and allow it on other platforms, then I would be cool with that. However, given Apples track record... does not seem likely.

rogifan says:

Like Amazon removing in-app purchases after they bought Comixology?

joshrocker says:

In all fairness, it maybe inconvenient but, you can still buy comics and read them on your ipad. You just have to jump through an additional hoop. The better analogy would have been if Amazon pulled comixology from ios users all together.

Dev from tipb says:

Or Apple forcing it out of the Kindle app and those like it?

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felface says:

I think apple is a genius in most respects except when it comes to anything to do with audio. Beats hardware is TERRIBLE it falls apart after a few months despite costing £100+ for most models and the sound is not high end by any means. Now wether they know how to correctly make high end or mid end headphones and match build quality and price i don't know maybe they do secretly and thats why apple is buying them

Bernard Walters says:

Sounds like a classic pump and dump; start a rumour that Apple is going to buy the company then sell the stock before it pops.

sectime says:

Kinda embarrassing for you but Beats Music is a private company. Sales last year 1.2 Billion Apple buying for 3.2 that quite a bargain. Nice thing about having a lot of money, you can help a longtime friend out.

Chris Kerrigan says:

Too bad Beats isn't a public company...

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richard451 says:

Apple buying for 3.2b what HTC valued and then dumped at only 1b? No wonder why everyone is leaving the company. God lets hope this rumor is false.

CanadianMacFan says:

Don't really see what Apple gets here for that amount of money. They don't need the headphones and it's an awful lot of money for the streaming side of the business. It's greatly inflated cost for the users and Apple isn't even interested in the users on other platforms. Apple does better when it acquires smaller companies with targeted technologies that compliment theirs.

Derrick4Real says:

it would get very profitable hardware to sell that doesn't compete with it's own products. That's what i think. You're talking portable bluetooth players, a large headphone line. Earbud line. I think there are some professional recording equipment too like recording mics but i'm not positive. But that's my guess.

willizen says:

all good points, but don't forget the brand cachet that Beats carriers, especially among the youth. Ask you average 16 y/o what headphone they would like to own if they could afford any, and they will say Beats.

dreyfus2 says:

Streaming rights acquired from labels are normally not transferable. The idea that Apple could not write a few apps for iOS and Android for less than $3.2 bn strikes me as odd... It is certainly not for Beats hardware either. Sincerely hope that rumor goes away.

agsystems says:

Warner Music group is one of the owners of the streaming services - maybe this has been worked out with them - I can't imagine Apple is paying this much without having the licensing locked for several years.

Jabid21 says:

So I guess it means bye-bye Android and Windows Phone apps.

NYRbeezer says:

Beats is so bad that when Bruce Springsteen ( don't care if you like him or not ) was listening to the mastered tracks of his last record, he called up the producer and said they sounded horrible. The produce asked him what he listened on and he said Beats headphones. They then sent a crew out to him had him listen on something else, and apparently it was just the headphones.... Beats is horrible.

hardcle says:

This could be a good move. Add a little Apple design polish and quality to the Beats hardware and include them with every handset, while still selling them separately. Get the marketing cachet of having Dr. Dre et al promoting Apple products. Fold Beats music into iTunes Radio while still offering the rebranded service on other platforms. I don't know about the price, but Apple's got that much cash underneath its proverbial couch cushions

Derrick4Real says:

On the plus side maybe i'd finally use an apple headphone.

On the negative side What Beats have going for them is the association with Dre, they style factor in his look, and obviously it's association with cool athletes and celebs. If Apple takes over and removes Dre honestly the cool is gone. It's will have gone geek. Which isn't exactly hardcore hip-hop.

jordanm341 says:

Beats is a really good headphone company, but he problem is that they are to expensive!! And if apple buys beats, the price will not change at all I believe... Unless they make a beats c...... Makes your mind wonder!!

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willizen says:

It's a lot of money for sure, but iTunes has been a huge component of Apple's revenue for many years, and sales are only going down. If this helps them stay competitive in the streaming music services arena, and if they can position the hardware well, Apple will continue to be the king of music.

linsiris says:

Makes sense if (as previously mentioned in some other post) Apple plans to make a separate app for radio, now can add good on-demand music service.

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DrewBear says:

I bet a nickel this goes the way of "heart rate-blood pressure-earpod" rumor. Apple is not going to pay $billions for headphones. All the music streaming services work on iOS devices. All the music streaming services are having problems making money. Again, not worth $billions.

The later rumor that Iovine may join Apple as a "special advisor" to Cook sounds more reasonable. But let's just give it a few days for the dust to settle. Financial Times certainly has a solid reputation from the print days, but much of their online stuff in recent memory has been iffy at best.

Roustermiller says:

Dre just conformed it on Facebook that the deal is done

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lucho808 says:

I think the Beats brand will disappear after the purchase. I have the feeling this was all about the licensing for their streaming service. Rather than negotiate with the labels who will try to squeeze every penny out of apple just cause they are apple, they just purchased the rights from Beats and they are good to go... Expect iTunes radio to compete against Spotify and Rdio.

Craig Schober says:

I think it's funny how analysts and apple fans harp on Apple for not making large multi-billion dollar purchases and then when Apple does, they all complain that they don't get it. Even if this rumor is true, none of you know what Apple has planned for such an acquisition. That's why you don't get it.

wgfinley says:

This isn't about streaming (Beats just kicked that off and it hasn't been a rousing success) it's about accessories. It's a huge opportunity for Apple they have been missing out on and ceding to others. Presuming you get Iovine and Dre along with it you tap in to the heart of the music business that put their product every athlete and celeb. I see it more as a counterpunch to Samsung's selfie spree.

rjholmes123 says:

Pandora Rules!!!!!!!!

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