Apple Officially Announces $3 Billion Acquisition of Beats, Finally
We first reported that Apple might be in talks to acquire Beats Music way back on May 8 — 20 days ago. Apple didn’t come out and confirm the deal then, and as more time went by, we wondered if the company might be holding off so that it could pair the announcement with the release of Dr. Dre’s long awaited album, “Detox.”
Details of the acquisition were still being worked out, apparently, as Apple officially let the cat out of the bag today by confirming the deal via press release (h/t 9 to 5 Mac). Apple will add Beats — including its hardware business and streaming music service — for a cool $3 billion, and the purchase will save Apple the trouble of having to build a competing streaming service while also bringing the talented minds of both Jimmy Iovine and Dr. Dre on board.
As far as titles go, The Wall Street Journal is reporting that the two Beats co-founders will simply be known as “Jimmy and Dre,” though the dropping of Dre’s very impressive “Dr.” title seems to be a step down, not up.
The acquisition is a bit uncharacteristic for Apple, which essentially admitted that it doesn’t always need to build everything itself when a suitable solution can be purchased. Apple could have gone ahead and built a streaming music service (and the company is no stranger to hardware), but it also seems to have recognized that the Beats brand has some power of its own. Together, the two could be a force.
Shortly after Apple’s press release went out, Tim Cook sent an internal memo out to employees. We’ve included the memo below.
This afternoon we announced that Apple is acquiring Beats Music and Beats Electronics, two fast-growing businesses which complement our product line and will help extend the Apple ecosystem in the future. Bringing our companies together paves the way for amazing developments which our customers will love.
Music is an important part of our lives and our culture. Music has the power to inspire us, to comfort us, and to send our emotions soaring. It brings people together and transcends the limits of spoken language.
Apple’s history in music began with selling Macs to musicians. That remains important to us today, but we also bring music to hundreds of millions of customers with iTunes, which is at the forefront of the digital music revolution. Music holds a special place in our hearts at Apple, and we know that we can make an even bigger contribution to something that is so important to our society. That’s why we have kept investing in music and why we’re bringing together these extraordinary teams — so we can continue to create the most innovative music products and services in the world.
Beats co-founders and music industry pioneers Jimmy Iovine and Dr. Dre will join Apple, along with their team of employees. Jimmy has been on the cutting edge of innovation in the music industry for decades, including as a key partner for Apple in the launch of the iTunes Music Store more than ten years ago. He has produced or collaborated with some of the most popular artists in history, and been an important contributor to the success of the iTunes Store.
Beats Music was built with deep respect for both artists and fans. We think it’s the first subscription service to really get it right. Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas. The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music.
The Beats Music team will report to Eddy. The teams will be getting to know each other better in the weeks ahead, and we are very excited about the possibilities for the future.
Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores. We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership.
Please join me in welcoming Beats to Apple. I hope you are as excited as I am about this new chapter in our history.
What do you think of the Beats acquisition being confirmed? Is it a good move for Apple, or would the company have been better off doing its own thing? Leave your thoughts below.