Apple Confirms $3 Billion Deal to Buy Beats Music and Electronics

Andrew Parks

By Andrew Parks

on 05.28.14 in News

As widely reported a few weeks back, Apple has confirmed its plans to buy out Beats Music and Beats Electronics for $3 billion, including $2.6 billion in cash and $400 million in stock options. In an official press release, Beats co-founder Jimmy Iovine said, “I’ve always known in my heart that Beats belonged with Apple. The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” added Apple CEO Tim Cook. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”

According to The New York Times, the Beats brand will remain separate from Apple’s, which means that the latter’s lukewarmly received iTunes Radio service will not be replaced by Beats’s subscription model. Iovine and Beats co-founder Dr. Dre will now work directly under Eddy Cue — Apple’s executive in charge of Internet services — however, so long as the deal is approved by regulatory agencies later this year.

While Cook called the partnership a “no-brainer,” financial analyst Maynard Um told the Times, “Apple was at the front of that [digital music] curve, and if that’s the reason for the acquisition it would lend credence to the view that maybe they’re not ahead of the curve anymore.”

As for why Apple didn’t build its own streaming service to rival Beats, Cook countered, “Could Eddy’s team have built a subscription service? Of course. We could’ve built those 27 other things ourselves, too. You don’t build everything yourself. It’s not one thing that excites us here. It’s the people. It’s the service.”