Apple has agreed to acquire subscription streaming music service Beats Music and Beats Electronics, which makes the popular Beats headphones, speakers and audio software for a total of $3 billion which could make Beats Co-founder DR. Dre the first hip-hop artist come steps closer to joining the billionaires’ club with his estimated worth pegged to climb from about $550 million to about $800 million
As part of the deal both Dr. Dre and his co-founder Jimmy Iovine, a veteran music executive are expected to join the Apple family
The move is expected to help the US tech giant, a pioneer in digital music with its iTunes platform, ramp up its efforts to counter the successful models of music streaming services such as Pandora and Spotify.
The acquisition of Beats, the maker of high-end audio equipment and behind a subscription streaming music service, will be Apple’s largest acquisition.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” chief executive Tim Cook said.
“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.”
“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “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.”
Bringing Beats into the Apple fold will offer opportunities to weave the iTunes Radio service into more devices, and even spread the App Store’s applications to other products, analysts say.
Adding Beats could also give Apple the ability to get more ad revenue from streaming services.
Subject to regulatory approvals, Apple expects the transaction to close in fiscal Q4.
Formally established in 2008 as the brainchild of legendary artist and producer Dr. Dre and Chairman of Interscope Geffen A&M Records Jimmy Iovine, 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.