Apple acquires Beats Electronics, which is a headphone and music company. The acquisition was known to be worth $3 billion.
The company was founded by Dr. Dre, who is a rapper and Jimmy lovine, who were one of the first to be the recording executives. The announcement had come yesterday – Wednesday, May 28. It was around three weeks when the deal had come out in the public as it got leaked.
Apple acquires Beats Electronics
It is understood that Apple acquires Beats Electronics in an effort to ward off the threats to iTunes Store. This is, actually the most expensive acquisition for Apple in its nearly four decade existence.
Apple will be paying $2.6 billion in cash and the remaining sum will be paid in the form of stocks, which will vest with an unknown time frame. It is expected that the deal between these two companies will materialize before October.
Beats had grossed nearly $1.1 billion last year in revenue. This simply means that Beats Electronics is certainly earning good moolah. As Apple takes over the company, it will also see an increase in their revenue as well when the new financial year gets underway from the month of October.
The association of Iovine and Dre dates back ages when the iTunes Store was still in its childhood. The same people are now working on the newer relationship with Apple iTunes. The twosome will again play a crucial role in the company’s music arm. The only thing is that the roles of these two aren’t yet confirmed.
The CEO of Apple pointed out that the music streaming service from Beats was the USP of the deal. Apart from that the headphone arm is also anticipated to be on the rise as well.
There is no doubt that Apple is pinning its hope against Beats to remain at the top of the digital music industry.