Apple To Take Over Beats

May 9, 2014 11:00 AM

Image and video hosting by TinyPic   Steve Jobs revolutionised the world with the iPod, ITunes and iRadio. The music industry had never seen a surge in online music sales before the iTunes Store debuted in 2001. With the popularity now waning and people using Spotify or Pandora instead, Apple have decided it is time to try taking the company in a new direction. In response to all the negative press surrounding the feud with Samsung, they now has a surprise hiding beneath all that mess. Apple will make a deal with record executive Jimmy Iovine and his hip-hop producer/ partner Dr Dre to take over their company, Beats Audio, for a reported $3.2 billion. Known for their premium quality headphones and range of audio devices marked with the iconic Beats trademark, Dr Dre’s earphones have been popularised by their vision of getting the fans to listen to tracks just the way the artist intends them to be heard in the final cut at the studio.

After collaborating with artists like Lady GaGa, Ludacris and Nicki Minaj from major labels to create an interesting range of products in the growing line, it seems now Dre is ready to leave his legacy in the more than capable hands of Apple. Labelling it as Tim Cook’s biggest acquisition since he took over as CEO of Apple, the announcement is expected in the next few days. This deal gives the company the much needed access to takeover Beats’ control of 27% of the $1.8bn headphone market and 57% of the market for “premium” versions.

Image and video hosting by TinyPic

It is reported that Apple will acquire Beats’ streaming service that was launched earlier this year along with the audio equipment, according to a report by the Financial Times who also reported that the management team at Beats will report to Tim Cook, but this could not be clarified as both the firms declined to give any comments.

While this will mark the largest acquisition for Apple it surprisingly isn’t the only one. Silently buying at least 24 companies in the last year and a half alone, this pricey appropriation of Beats will not be the only one in the long list Apple plan to take over in the future. Strategically, the company is interested in the expertise Beats has in producing and developing wearable products. This move is a calculated one since Apple is close on the heels of launching the iWatch.

Image and video hosting by TinyPic

Beats’ acquisition is sure to make Iovine and Dr Dre quite rich as high budget takeovers seem to be ruling the market. Following high-priced deals with Google’s acquisition of NestLabs for $3.2bn and Facebook’s notoriously priced $19bn offer for Whatsapp and not to forget their $2bn takeover of VR firm Oculus, this deal will make news if there is any change in the speculated amount and will sure raise some unwanted eyebrows.

 Apple executives, Tim Cook and Eddy Cue have been discussing a merger that allows joint streaming and allows iRadio to still run as a free service while targeting Beats Music as an alternative to Spotify and Pandora. The partnership will also see Apple retailing Beats merchandise along with Chrysler, Hewlett Packard and HTC.

 

What are your thoughts? Is this a surprising move by Apple or have we come to expect nothing less from the technology giants? Share your thoughts in the comment section below!

Tags:
%d bloggers like this: