Rolling Stone magazine is reporting that Apple is officially confirming that they will be purchasing Beats By Dre. Though $200 million shy of the original projected price, Dr. Dre is sure to be happy with his share of the $3 billion that has been reported. He will also be joining the Apple team along side Jimmy Iovine, though their roles have yet to be specified. Pending approval from the government, Apple has said that the deal will be closed no later than September 28th.
The fellas over at Beats have got to be popping the champagne right about now. Iovine has always been an avid Apple fanatic. He was reported as saying, “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology.” And now he will have an office located somewhere on the tech guru’s campus.
Though Apple has not disclosed its plans for its latest acquisition, most experts believe the main motivation behind it has to do with Beats successful music subscription service. It is a service similar to Spotify, though it is suppose to be more intuitive to its users preferences. Apple’s radio service has been lackluster since its launch to say the least, and this will help Apple fix its problem. Apple will also be able to incorporate the Beats speakers and headphones into its own hardware, as well as limit to what other competitors have access to it.
There are even some who speculate that the deal came with the goal of acquiring Iovine and Dre for their star power, rather than for the company itself. And while $3 billion just to add these two individuals to their repertoire may seem like a lot, it is only 0.6% of the company’s market cap. Regardless of the motivation though, Apple is making all the right moves. Bringing one iconic brand under the roof of another can only lead to good things. It will be exciting to see how Beats will change Apple.
From left to right: Beats executive and media mogul Jimmy Iovine, Apple CEO Tim Cook, Dr. Dre, and Apple Senior Vice President of Internet Software and Services Eddy Cue. Apple
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