Apple is reportedly laying down $3.2 billion to acquire the four-year-old audio specialist Beats Electronics.
Beats headphones feature heavily in the majority of Apple stores across the world, serving as one of the most popular alternatives to the included white earbuds. Whilst this comes as a result of an existing close relationship between two brands that share many of the same values, it now turns out that Apple has decided to bring Beats into the family in a reported $3.2 billion acquisition.
Beats Electronics came into being back in 2008 under the management of Jimmy Iovine and rapper-turned-music producer Dr Dre, rapidly gaining notoriety for its high-profile celebrity endorsements and premium, designer headphones. A variety of Beats headphones have become a mainstay in Apple stores internationally and the company had previously partnered with the likes of HP and HTC to bring its audio technologies to other brands.
The Financial Times has stated that talks aren’t yet finalised and the deal could still collapse, but an agreement is expected to be reached early sometime next week. The acquisition has caught the attention of many as a Steve Jobs-helmed Apple shied away from high-profile purchases like this, whilst current Apple CEO, Tim Cook has decided to proceed with this strategic purchase.
So why is Apple buying Beats? Well on a surface level it simply makes sense. With Beats headphones being one of the most prevalent third-party headphone brands sold in Apple stores, the company would simply be taking in profits from sales of those headphones too.
Beats Music; a subscription based music service also launched at the start of 2014, serving as a competitor to the likes of Spotify, Deezer and other music/streaming services. Despite Apple’s initial success in the digital music industry through iTunes, it’s failed to draw people away from rival services through products like iTunes Match and iTunes Radio, so perhaps pumping money into Beats Music going forward is a potential strategy.
What do you think of Beats products and Apple’s decision to acquire Beats Electronics? Let us know in the comments down below.