It was probably the worst kept secret of the month. However, Apple has officially announced it has purchased Beats Music and Beats Electronics, its largest acquisition to date. Apple will acquire both the subscription streaming music service and the electronics branch for the price of $3 billion ($2.6 billion in cash, and $400 million in stock), while Beats co-founders Jimmy Iovine and Dr. Dre will join Apple as part of the acquisition.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Apple’s CEO Tim Cook in an official statement. “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 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.” Cook, Dr. Dre, Iovine and iTunes chief Eddy Cue also sat down with USA Today to further discuss the acquisition, stating (without going into too much detail) that expanding Beats’ brand while keeping it intact is among Apple’s top priorities. “This is about music and its importance to society and to Apple,” Cook told USA Today. “We’ve found kindred spirits in Jimmy and Dre and we’re going to advance what they’ve done to a whole different level.”
Apple’s acquisition of Beats had been met by a mixed response. However, this huge acquisition could prove to be the right move for both Apple and Beats (both of whose streaming services have lagged behind stiff competition from Spotify and Pandora). Whether this will lead to Apple/Beats completely dominating the subscription music streaming realm remains to be seen, but it definitely gives them a fighting chance. The acquisition is expected to be approved later this year.