Apple today announced it has agreed to acquire the critically acclaimed subscription streaming music service Beats Music, and Beats Electronics, manufacturer of the popular Beats headphones, speakers and audio software. Beats co-founders Jimmy Iovine and Dr. Dre will join Apple as a part of this acquisition. Apple is acquiring the two companies for a total of $3 billion, consisting of a purchase price of approximately $2.6 billion and approximately $400 million that will vest over time.
Subject to regulatory approvals, Apple expects the transaction to close in fiscal Q4.
Tim Cook, CEO Apple CEO said at the ReCode Code Conference, “This is all about music, and we’ve always viewed that music was key to society and culture. Music’s always been at the heart of Apple. We’ve sold Macs to musicians since the beginning of Macs. And we accelerated the music industry with the digital music revolution with the iPod and the iTunes music store.”
What Beats brings to Apple are guys with very rare skills. They provide us with incredible people, that don’t grow on trees. They’re creative souls, kindred spirits. They really get music deeply. So we get an infusion in Apple of some great talent. Also, we’re always future-focused. So it’s not what Apple and Beats are doing today. It’s what we believe pairing the two together can produce for the future.
Tim Cook also shared that Apple has acquired 27 companies between fiscal year 2013 and this year so far.
Founded in 2008, Beats Electronics (Beats) comprises the Beats by Dr. Dre family of premium consumer headphones, earphones, and speakers as well as patented Beats Audio software technology and streaming music subscription service Beats Music. Beats Music is a subscription streaming music service that focuses on providing a personalized music experience for each user through a unique blend of digital innovation and musical passion. The streaming music service has 250,000 paying subscribers within 3 months of its launch.
Music superstars including Lady Gaga, Lil Wayne and Nicki Minaj have designed their own customized Beats headphones and speakers. With this acquisition the Beats product lineup will be offered in many more countries through the Apple Online Store, Apple’s retail stores and select Apple Authorized Resellers.
Jimmy Iovine, Beats co-founder commented, “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.”
Iovine has been at the forefront of innovation in the music industry for decades, and he has been an instrumental partner for Apple and iTunes for more than a decade. He has produced or collaborated with some of the most successful artists in the history of the iTunes Store, helping make it the world’s number one music retailer. Iovine and Dr. Dre are sound pioneers, artists and entrepreneurs.