Apple to buy beats for $3.5 Billion
Late Thursday night, the Financial Times reported that Apple was in talks to buy Beats for $3.2 billion; the deal would be the computer giant’s largest acquisition ever. Dre’s stake in Beats currently stands at somewhere around 20-25%; Forbes valued the company at $2 billion in their latest round of estimates. Well it makes a point, Dre can be the richest Hip Hop artist now.
Both companies are hashing out details and the envisioned deal could still fall through, one person told Reuters on condition of anonymity because the discussions were private.
A second source familiar with the matter told Reuters that Apple was in the market for a subscription-based music service to complement its “iRadio” ad-based offering, launched in 2013 as part of an attempt to jump into a music-streaming arena then split between a handful of startups such as Pandora Inc.
Should the deal close, it would mark a major payout for Beats founders and music industry icons Jimmy Iovine and Dr. Dre, who launched the Santa Monica, Calif.-based company in 2008. Its products were produced by Monster Cable until 2012, when founders bought back control of the company from Monster and mobile hardware maker HTC.
A deal could be announced next week, individuals close to the companies say.
The deal stands out not only for Beats’ holdings, but because Apple rarely buys other companies to bolster its bottom line. That’s changed under Apple chief Tim Cook, who has dug into the company’s $133 billion coffers and acquired 24 companies in the past 18 months. He is considering other additions to the company to help its products stand out from rivals, including Samsung, and inject a “cool factor” back into the company that has relied on iTunes, its iPhone and iPads for far too long.
The Beats’ famous product is Beats by Dr. Dre and the brand is also licensed to others under the Beats Audio brand and can be found in cars made by Chrysler, HTC smartphones and HP computers. So let’s say that is Apple is trying to get on the market of android phones to have a 5 dimensional income.
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