Remember earlier this month when we learned from Dr. Dre that Apple was lookin’ to buy his company Beats Electronics for upwards of $3 billion dollars, which would make him the first billionaire in Hip Hop? Well, today Apple has confirmed publicly their plan to buy Beats which means that Dr. Dre wasn’t just talkin’ shizz … he was celebrating what we now learn officially — that he is going to be a very rich man once Apple pays for and purchases Beats Electronics.
Apple, the company that turned digital music into a mainstream phenomenon, said on Wednesday that it was buying Beats Electronics, the rising music brand, for $3 billion, in a move that will help it play catch-up with rivals that offer subscription-based music services. Apple and Beats executives on Wednesday said that the companies would work together to give consumers worldwide more options to listen to music. The Beats brand will remain separate from Apple’s, and Apple will offer both Beats’s streaming music service and premium headphones. Apple said that iTunes, which sells individual songs and albums and offers a streaming radio service, would continue to be offered alongside the Beats music service. The purchase of Beats brings Jimmy Iovine, a longtime music executive, and Dr. Dre, the rapper, to work under Eddy Cue, Apple’s executive in charge of Internet services. Dr. Dre and Mr. Iovine, who founded Beats,join a list of prominent executives that Apple has added to its roster, including Angela Ahrendts, the former chief of Burberry, and Paul Deneve, the former chief of Yves Saint Laurent. In an interview here at Apple’s headquarters, Timothy D. Cook, Apple’s chief executive, repeatedly emphasized the talent that Dr. Dre and Mr. Iovine would bring to Apple. He also praised the Beats music service, which has people create playlists for people to listen to. “These guys are really unique,” Mr. Cook said. “It’s like finding the precise grain of sand on the beach. They’re rare and very hard to find.” Apple is paying for the deal with $2.6 billion in cash — hardly a dent in the company’s huge cash pile — and $400 million in stock. The company expects the deal to be approved later this year. For Apple, the acquisition of Beats, expected for weeks, largely follows a familiar pattern. Apple has historically bought technology outfits that have resources and talent that it can blend into future devices and online services. Beats, which offers headphones and a fledgling music service, fits that criteria. But the Beats deal is also different from the others. Until now, Apple, the richest tech company in the world, has avoided billion-dollar takeovers in favor of smaller deals. The Beats deal is its largest ever. Apple declined to disclose plans for products it will make with Beats, so it will take time to see how the acquisition materializes.
Heh. If Dre was celebrating before, I bet he is really celebrating today … with a crazy ass celebration to come once Apple cuts him a check. The acquisition of Beats means that Apple is serious about moving into the world of music subscription services. They’ve already pretty much conquered the world of online music sales with iTunes, now they want to conquer the world of online music rentals, too. This Beats deal will be Apple‘s biggest ever. It will be very interesting to see what Apple does with Beats once they gain full control of the company.