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Old May 27, 2014, 08:32 PM   #1
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Apple to Announce Beats Acquisition This Week, Drops Price to $3 Billion




Apple's rumored acquisition of Beats will indeed happen, just for a slightly reduced fee, according to a report from the New York Post this evening. The acquisition, which was originally reported to be roughly $3.2 billion for both Beats companies -- the headphone and consumer electronics division as well as the streaming music service -- will now happen at $3 billion.

Since the acquisition was originally reported on May 8, Spotify -- the leading player in the subscription music field -- announced that it had 10 million paying subscribers, and this could have given Apple additional negotiating leverage.

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Still, the company is understood to place a high value on the profitable Beats audio business which retails headphones -- costing up to $450 -- and speakers around the globe.

That business recorded sales of $1.3 billion in 2013.

"Apple hadn't even begun its due diligence process when news of the number came out," one source close to the talks said Tuesday.
The paper notes that both Jimmy Iovine and fellow Beats co-founder Dr. Dre are expected to attend Apple's Worldwide Developer Conference next week. Dre is expected to net somewhere around $750 million from the sale as he currently owns approximately 25 percent of the company.

Article Link: Apple to Announce Beats Acquisition This Week, Drops Price to $3 Billion
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Old May 27, 2014, 08:34 PM   #2
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Pity...was hoping the deal had fallen thru.
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Old May 27, 2014, 08:34 PM   #3
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I was under the impression that people were quoting 3b and 3.2b like they were the same thing.
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Old May 27, 2014, 08:34 PM   #4
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Hope they don't waste time on this at the WWDC Keynote.
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Old May 27, 2014, 08:35 PM   #5
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My hopes for WWDC...

1) Dr. Dre comes out on stage.

2) Dr. Dre performs a closing musical act, dropping one of his classics and then something new from the Detox album... give it to us, Dre!!!
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Old May 27, 2014, 08:36 PM   #6
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So basically Apple just wants the revenue stream from overpriced headphones. Seriously Tim?
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Old May 27, 2014, 08:37 PM   #7
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Tim Cook: "One more thing. We bought Beats!"

<crickets>
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Old May 27, 2014, 08:37 PM   #8
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Quote:
Originally Posted by tjl3 View Post
Tim Cook, "One more thing. We bought Beats!"

<crickets>
I'd rather people booed.
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Old May 27, 2014, 08:39 PM   #9
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Quote:
Originally Posted by tjl3 View Post
Tim Cook: "One more thing. We bought Beats!"

<crickets>
Replace <crickets> with <silence, followed by a lone person yelling "Morons!">
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Old May 27, 2014, 08:39 PM   #10
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So its not finalized yet, 200 million is alot of money.
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Old May 27, 2014, 08:39 PM   #11
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Quote:
Originally Posted by Rogifan View Post
So basically Apple just wants the revenue stream from overpriced headphones. Seriously Tim?
You're a bit too obsessed with what is still just speculation.
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Old May 27, 2014, 08:40 PM   #12
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That's still 3 billions too many.
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Old May 27, 2014, 08:41 PM   #13
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what one billion dollars looks like:

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Old May 27, 2014, 08:42 PM   #14
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Well NOW this deal makes perfect sense...
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Old May 27, 2014, 08:43 PM   #15
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Quote:
Originally Posted by thekev View Post
You're a bit too obsessed with what is still just speculation.
But all the speculation points to the same thing. I have yet to see one of these stories mention any amazing tech/IP that Apple is after. What's really scary is this part from the NY Post article:

Quote:
Apple has also apparently just begun doing its “due diligence” on Beats. When the original $3.2 billion number was leaked, the company had not yet done any of that, and since it started, it has apparently dug up some unsettling information.
So Apple just begun doing "due diligence" and dug up some unsettling information but are still going to announce the acquisition this week? WTF?!?
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Old May 27, 2014, 08:48 PM   #16
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To those who are complaining that $200 million is a lot of money: Yes, it is, but to Apple, $200 million is barely anything.

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Old May 27, 2014, 08:48 PM   #17
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$1.3 billion in revenue in 2013? That's pretty impressive.
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Old May 27, 2014, 08:50 PM   #18
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If this goes down, Dre will not net $750 million; gross, maybe.
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Old May 27, 2014, 08:51 PM   #19
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Execs: 'We need something to boost our Music division. What should we do?'.
Tim: 'Beats me.'

(I haven't read that from anywhere, but I doubt I'm the first to make that up).
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Old May 27, 2014, 08:52 PM   #20
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Quote:
Originally Posted by Rogifan View Post
But all the speculation points to the same thing. I have yet to see one of these stories mention any amazing tech/IP that Apple is after.
how many more headphones do you think will sell if they're apple&beats branded vs. beats alone?

even if nothing changed from the current iteration of beats?.. once they go through the apple engineers for a couple iterations, i'd be willing to be that even the more vocal naysayers in the threads will eventually buy a set.
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Old May 27, 2014, 08:53 PM   #21
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Would make a great announcement for WWDC.
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Old May 27, 2014, 08:54 PM   #22
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Someone explain why so many people hate this deal on this site? Who cares what apple spends it's money on as long as it keeps making great products.
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Old May 27, 2014, 08:55 PM   #23
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Valuation

Apple bought Beats for:

1: To help restore their "cool" factor in Music. Something they lost dramatically when they started Ping.

2: A kickstart in Music streaming. aka. the death of music buying individual tracks

3: Acqui-hire of Iovine and Dre to sway TV cable companies to bring iTV to market.

4: They get the content licences for streaming from Beats. They don't if they were to purchase spotify.

5: Beats are a profitable company
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Old May 27, 2014, 08:56 PM   #24
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Quote:
Originally Posted by flat five View Post
how many more headphones do you think will sell if they're apple&beats branded vs. beats alone?

even if nothing changed from the current iteration of beats?.. once they go through the apple engineers for a couple iterations, i'd be willing to be that even the more vocal naysayers in the threads will eventually buy a set.
Who cares? Apple has more important things to worry about than headphones. If Apple doesn't have any idea how else to spend $3 billion I'll give them an idea: more iCloud storage at a cheaper price. Microsoft gives you 7GB cloud storage for free. I just got charged $20 for 10GB iCloud storage.
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Old May 27, 2014, 08:57 PM   #25
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I'm interested in knowing how they value these companies, namely Beats, to come up with the price
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