The last few weeks have been dominated by rumors of Apple purchasing Beats. There have been rumors that it was on, rumors that it was off, and a very NSFW video (you can find it online) of actor Tyrese Gibson and Beats Co-Founder Dr. Dre that if the rumor mill is to be believed, almost derailed the whole thing. Now what is and is not true doesn’t matter, Dr. Dre (along with his business partner Jimmy Iovine) is indeed the first billionaire in hip hop. Apple has officially acquired Beats for $3.0 billion, $2.6 billion in cash, $400 million in Apple stock.
Apple is acquiring both parts of Beats, its hardware division which makes earphones, headphones, speakers, and accessories, and the Beats Music subscription service. There are some unknowns to this, how Beats music will interact with Apple’s iTunes and where Beats Audio fits. Beats Audio provides speaker systems to computers and vehicles. Beats Audio products can currently be found in FCA’s Fiat, Chrysler, and Dodge divisions, and Apple competitor HP’s PCs.
Also included in the acquisition are the co-founder, Andre “Dr. Dre” Young, and Jimmy Iovine. Dre is a rapper and record producer while Iovine is a heavyweight in the record industry He founded Interscope records and was the chairman of Universal Music’s Interscope Geffen A&M division. He stepped down concurrent to taking his position at Apple. Dre and Iovine will report to Eddy Cue, Apple’s SVP of Internet Software and Services. Given Iovine’s and Dre’s connections, this deal could be as much about acquiring talent and connections as it is about Beats hardware and services.
The Beats acquisition is expected to close in fiscal Q4 subject to approvals. Do you like this acquisition? Do you think this is about Beats’ headphone line or its founders? Let us know in the comments below and on social media.