Apple rumored to buy Beats to jumpstart its streaming music ambitions

Apple rumored to buy Beats to jumpstart its streaming music ambitions

Summary: The service would bring a line of audio accessories, including headphones and speakers, and a streaming music service to the Apple portfolio.

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TOPICS: Apple
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Apple rumored to buy Beats to jumpstart its streaming music ambitions - Jason O'Grady
(Photo: Beats By Dre)

The Financial Times reports that Apple is in late stage negotiations to acquire Beats By Dre, saying that the deal could be finalized as soon as next week. According to the report Apple is offering $3.2 billion for the company which manufactures a series of audio hardware which includes headphones and Bluetooth speakers. 

FT says that Apple will acquire the streaming business alongside Beats' hardware division, with the Beats management team reporting to Apple CEO Tim Cook.

The CrunchBase entry on Beats By Dre:

Established in 2006 as the brainchild of legendary artist and producer Dr. Dre and Chairman of Interscope Geffen A&M Records Jimmy Iovine, Beats Electronics provides a premium sound experience at every touch point of the consumer’s life. It is the parent company of the Beats™ by Dr. Dre™ line of high-quality headphones, Beats Audio™ HD-sound systems, and the MOG digital music service.

Possibly most appealing to Apple is Beats Music the company's recently-launched music streaming service. Apple has been rumored to enter the subscription music business for some time and Beats Music would give the company a jump start.

Beats Music launched in January 2014 and features curated playlists created by musicians and music writers. Beats Music is comparable to other streaming services like Spotify and Rdio and charges $9.99 per month for one user on up to three devices. The main difference is that Beats Music doesn't offer a free or ad-supported option. 

CNET notes Beats Music's catalog of more than 20 million songs is on par with that of Spotify's, and "could become a central part of Apple's music strategy given the launch of its online radio service, iTunes Radio." 

Apple and Beats declined to comment on the deal.

Update 2014-0509 1:35pm ET: Dr. Dre appears to have confirmed the transaction in a new video posted to YouTube, calling himself "the first billionaire in Hip Hop."

Topic: Apple

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12 comments
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  • *New Slogan*

    Anything Beats Apple!
    Mujibahr
    • or just as easily

      Apple Beats Anything
      Henry 3 Dogg
  • They better keep the headphone products for sale

    Or there will be some upset DJs out there! (Though I prefer AKG.)
    Mac_PC_FenceSitter
  • Meh...

    Xbox music is free on PC and Tablets
    Owl:Net
    • "XBox music" sounds so desperate

      Let's take an establish brand that everyone associates with gaming to push music. Better off keeping Zune.
      dave95.
    • You place no value on your time.

      X box music is only free if you place no value on your time.

      You would have to be a real loser for the value of the time spent listening to advertisements on xBox radio not to be enough to cover a subscription to a service with far better content.

      But if you place zero value on your time, why should we doubt you.
      Henry 3 Dogg
  • Apple does not need a streaming business ...

    ... They have one.

    So I guess Beats started a rumour that Facebook were sniffing around.
    Heenan73
    • streaming vs subscription vs managed content streams

      Unfortunately Jason, like most journalists, can't get the distinction between streaming, subscription and managed content streams straight in his mind.

      What is he thinking to write a paragraph like

      "Possibly most appealing to Apple is Beats Music the company's recently-launched music streaming service. Apple has been rumored to enter the subscription music business for some time and Beats Music would give the company a jump start."

      Yes, subscription services generally stream, but I regularly download stuff from the BBC to which I am a license paying subscriber. Including downloading large chunks of musical managed content stream.

      And I regularly stream stuff from iTunes match, which I have bought, and from iTunes store which I have rented.

      The Beats service is a streamed managed content stream. Just like iTunes Radio.

      iTunes radio is a subscription service, or free with advertising.

      Streaming and subscription are totally orthogonal concepts.
      Henry 3 Dogg
  • Perfect combination

    Another over priced substandard product to go along with the rest of Apples line up.
    Pastabake
  • Should be interesting...

    It should be interesting to see how this affects the current HP PC lineup. One of their biggest "features" is Beats Audio. Surely Apple will nix that.

    In my opinion, the entirety of the Beats Audio lineup is just overpriced junk with a retired rapper's name attached to it. Apple would have been better off teaming up with someone like Bose for audio implements and done their own streaming service.
    heymatthew
  • Maybe...

    Apple wants the Beats engineering team for their new products. After all, the iPod needs a refresh and better audio would be the ticket. Toss in a new music spec (higher def music files, remember the news about a month ago?) and you have the reason...
    Tony Burzio
  • I don't think Jobs would have approved

    He probably would have just ordered the creation of something maybe called iStream to complement iTunes, as well as have another team tasked to come up with a highly advanced ear bud/headphone design.
    JustCallMeBC