“Apple is closing in on its largest ever acquisition with the planned $3.2bn purchase of Beats Electronics, the headphone maker and music streaming operator founded by music producer Jimmy Iovine and the hip-hop star Dr Dre,” Matthew Garrahan and Tim Bradshaw report for The Financial Times.
“The deal could be announced as early as next week, people familiar with the negotiations said, but they cautioned that some details had yet to be agreed and talks could still fall apart,” Garrahan and Bradshaw report. “A deal of this scale would represent a radical departure for Tim Cook, chief executive of the iPhone maker: under the late Steve Jobs, Apple was reluctant to pursue high-profile acquisitions.”
“Apple will acquire Beats’ streaming music service, which launched this year, and its audio equipment business, which includes its brand of headphones and audio equipment. The Beats management team will report to Mr Cook, said people familiar with the deal,” Garrahan and Bradshaw report. “While Beats commands a leading position in the premium headphone market, its real value to Apple is in revitalising its ‘cool’ at a time when iTunes has waned in popularity and Samsung’s marketing campaigns have savaged the iPhone’s brand.”
MacDailyNews Take: Oh, yes, absolutely “savaged.”
• Samsung beats Apple’s volume – a race Cupertino does not run – and loses badly to Apple’s profits – May 8, 2014
• Samsung Electronics replaces mobile design head over lackluster Galaxy S5 phone – May 8, 2014
• Canaccord: iPhone 5s top seller at all major U.S. carriers – May 8, 2014
• Apple smashes Street with revenue of $45.65 billion in Q214 – April 23, 2014
How will Apple ever survive such raw, unbridled savagery?
Garrahan and Bradshaw report, “Apple has dabbled in music streaming but never launched an unlimited subscription service to compete with fast-growing rivals to iTunes such as Spotify. In 2009 it acquired Lala, a music streaming service, and last year launched iTunes Radio, which competes with elements of Beats, as well as more established players such as Pandora… The pricey deal is likely to raise questions about Apple’s internal capability to innovate after the death of Mr Jobs in 2011.”
Read more in the full article here.
MacDailyNews Take: Beats. A triumph of marketing over sound quality.
Hopefully, if the deal goes through, some part of Beats’ Music subscription service will be worth it.