Apple in Talks to Acquire Beats Electronics for $3.2 Billion [Updated]

Discussion in 'MacRumors.com News Discussion' started by MacRumors, May 8, 2014.

  1. macrumors bot

    MacRumors

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    Apple is said to be close to completing an acquisition of Beats Electronics, the headphone company and streaming music service created by Dr. Dre and Jimmy Iovine. According to the Financial Times, the deal could be announced as soon as next week if negotiations work out.

    [​IMG]
    Apple is said to be paying $3.2 billion dollars for the company, a sum that dwarfs the $404 million Apple spent to acquire NeXT in 1996, its largest purchase to date. As of its last earnings call, Apple had some $150 billion in cash on hand, plenty to cover the large acquisition.

    Tim Cook said earlier this year that the company was open to making large acquisitions if the purchases made sense. "We have no problem spending 10 figures for the right company, for the right fit that's in the best interest of Apple in the long-term. None. Zero."

    In addition to producing a range of popular premium headphones and speakers that Apple currently sells in its stores, Beats also recently launched its Beats Music service, a direct competitor to Spotify, Pandora, and Apple's own iTunes Radio service. Beats Music is, however, a subscription-based on-demand service, which could bolster Apple's free station-based iTunes Radio service.

    The purchase of Beats Electronics comes as Apple has been rumored to be working on a complete overhaul of iTunes in order to address declining music sales. Part of Apple's revamp was said to include an on-demand streaming music service similar to Spotify, but the company may have elected to purchase Beats rather than designing its own service from the ground up.

    Beats Music, which is available to subscribers for $9.99 per month, focuses heavily on curation. The company has hired music experts from popular radio stations around the country to create stations and playlists from the service's 20 million song catalog. It is unclear if Apple will keep the Beats Music format intact if it does indeed acquire the company, but the curation will fit well with the iTunes Music Store, which also offers music choices picked by Apple editors.

    Apple and Beats Electronics have had an ongoing relationship, with Beats CEO Jimmy Iovine meeting with Tim Cook and other Apple executives about a possible partnership back in January of 2013. Iovine also reportedly pitched Steve Jobs on a streaming music service a decade ago, but Jobs passed on the opportunity.

    According to the Financial Times, the deal is still in the works with some details yet to be ironed out, suggesting "talks could still fall apart."

    Update May 8 3:30 PM PT: Bloomberg, The Wall Street Journal, and The New York Times have confirmed that Apple is in talks with Beats Electronics over a possible acquisition.

    Update May 9 4:24 AM PT: A new video on Facebook (warning: NSFW language) posted by actor Tyrese Gibson (via The Next Web) shows Beats Electronics founder and musician Dr. Dre seemingly confirming the acquisition, however Apple and Beats Electronics have yet to speak on the potential purchase.

    Update May 9 5:08 AM PT: The video featuring Dr. Dre seemingly confirming the acquisition has been pulled from Facebook, however it has since been reuploaded to YouTube by another source.

    Article Link: Apple in Talks to Acquire Beats Electronics for $3.2 Billion [Updated]
     
  2. macrumors 6502

    Broph

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    #2
    Am I the only one that's totally surprised by this? Seems pretty random. And pointless IMO.
     
  3. macrumors newbie

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    #3
    Why? Beats is terrible at audio. If it was Bose/Bowers & Wilkins then I wouldn't be so surprised.
     
  4. macrumors 65816

    aliensporebomb

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    #4
    Great

    Great! So we can get HIDEOUS thocky plastic hard sounding headphones that are trendy fashion accessories.

    It instantly takes any mix you throw at it and makes it sound like a overcompressed horrific plastic thocking sound.
     
  5. macrumors 65816

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    #5
    You know, I was expecting more than one headphones designed Apple.

    "Ive" been waiting for a larger selection of Apple designed headphones for quite some time.
     
  6. macrumors 6502a

    timbloom

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  7. macrumors 68020

    XboxMySocks

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    #7
    Bose is not much better than Beats are :s
     
  8. macrumors member

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    #8
    Maybe Apple will include a pair of Beats with every iPod instead of earbuds :cool:
     
  9. macrumors 68030

    zorinlynx

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    #9
    WTF! I can't think of a worse brand to acquire. Their products are tacky-looking and don't sound as good as some of the other manufacturers like JBL, B&O and so on.

    What are they thinking? The look of Beats products doesn't fit into Apple's design language at all.
     
  10. macrumors 6502a

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  11. macrumors regular

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  12. macrumors regular

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    #12
    Buying this crappy headphone maker would be silly.
     
  13. okboy, May 8, 2014
    Last edited: May 13, 2014

    macrumors regular

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    #13
    That's interesting. I always thought of them as a spin-off of Monster with a me-too streaming service. I'd like to know what makes them worth anything to Apple.

    Maybe Tim just wanted to buy a dime bag and there was some confusion?

    EDIT: It was wrong of me to post this. It's racist. I'm very sorry. Please don't up vote it.
     
  14. macrumors regular

    ironman159

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    #14
    My body is ready for Beats music service fused with iTunes Radio in iOS 8.
     
  15. macrumors 6502a

    timbloom

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    #15
    Well... when you say it that way.. does sound like an Apple market.
     
  16. macrumors newbie

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    #16
    Bose is a billion times better than Beats
     
  17. macrumors 6502

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  18. macrumors member

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    #18
    Does not seem like a good acquisition for Apple to do. Beats is all marketing and branding, areas that Apple has no obvious need for.
     
  19. macrumors regular

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    Nov 13, 2008
    #19
    Beats headphones are already over priced for their quality. Now we're going to maybe see an Ive-rendition of beats for even more money?? I'm not seeing the upside to this acquisition. Beats doesn't offer any ground breaking technology for audio quality, what's Tim thinking?
     
  20. macrumors 6502a

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    #20
    Sound is pretty good imho, sure they are no B&W, Senheiser or JBL but they sound good, too much basses but this is the sound young users wants.
     
  21. macrumors 65816

    DTphonehome

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    #21
    This made me sick to my stomach. I REALLY don't think this is true… waaaaaaaay too much money for a junk brand. Apple knows better than to throw away that kind of cash. They didn't buy Waze for 1B, no way they buy this for 3.2.
     
  22. macrumors 6502

    Joined:
    Jul 22, 2011
    #22
    Try out Bose's noise canceling headphones. The sound is better, as well as filtering out outside noises. Beats are known for their 'swag' and heavy bass.

    Apple on the other hand is a luxury brand. I can't see swagalicious luxury go hand in hand. :p
     
  23. macrumors 6502

    UnfetteredMind

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    #23
    Have to agree with the general consensus here ... why? Seems rather pointless and way too much money for what they'd be getting. Hopefully this is one rumor that doesn't pan out.
     
  24. macrumors 6502a

    neuropsychguy

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    #24
    Hopefully this rumor is not true. Beats does not make good audio products. I take that back, a couple of their headphones are good but most are objectively terrible.
     
  25. macrumors member

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    Aug 9, 2010
    #25
    I'm not saying I think this is the best idea, but why are people only thinking about the headphones/earphones?

    To me, this is a clear play at their streaming service and audio technologies. Nothing (necessarily) to do with the actual headphones/earphones.
     

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