APPLE TO ACQUIRE BEAT BY DRE

In what would be one of Apple’s largest acquisitions ever, the company is considering buying the music streaming and hardware company Beats By Dre for $3.2 billion, according to a report.

The deal could be announced as soon as next week, though the talks could fall apart as is the case with many acquisitions, the FT said. Beats most recently launched a cross-platform music streaming service and has benefitted from a strong public push by Dr. Dre. Apple CEO Tim Cook reportedly met with Beats executives in February last year to discuss a potential partnership involving the new streaming service released by Beats.
What Apple would get is essentially a hardware and streaming company centered around music that has established a prominent brand — which, for Apple, makes enough sense given that it is also at its core a hardware company that keeps music close to its heart. Parts of Beats seem like a natural product fit for Apple, which has tried to build its own music streaming service with iTunes Radio. Apple also sells its own headphones with the iPhones it sells, the EarPods, and has been reportedly experimenting with other wearable technology.
At the very least, it would give Apple another way into the increasingly popular streaming music market beyond iTunes Radio. According to IFPI,more than 28million consumers paid for a music subscription in 2013, up from 8 million in 2011. What’s more, the $1.1 billion in revenue that IFPI attributed to subscriptions for streaming music in 2013 represents a year-over-year increase in excess of 51%. Many industry watchers are viewing streaming music as a way to return to growth as downloads — iTunes’ bread and butter — have begun to flatline.

Apple’s planned deal to buy Beats Electronics for $3.2 billion may not be finalized until next week, according to people familiar with the transaction. That’s a longer timetable than some people expected as recently as a few days ago.

Once the deal is completed, Beats co-founders Dr. Dre and Jimmy Iovine are expected to take on senior roles at Apple, with Iovine potentially becoming Apple's new music chief. In addition, Iovine and Dre's first official appearance as Apple employees is expected to take place at June's Worldwide Developer Conference.

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