Apple in talks to buy Beats Electronics for $3.2 billion

“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.”

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• 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.

61 Comments

  1. This sounds like bullshit. Just another wacky rumour like the iTV. There’s no way Beats is worth $3.2 billion. As others have said, the Beats headphones are terrible and the laptop tech isn’t that great either.

    Can’t see this happening.

  2. Would be an admission of itunes radio failure. They would have to have all the media agreements in place. Furthermore, this would be the fist acquisition that has been leaked. May be a leak to get Samesung to jump in and p*ss away $3 billion

  3. Yes, the headsets suck, but the margins are huge and Apple loves huge product margins. Apple probably sees a turnkey solution for streaming to the millennials.

  4. Nobody wants to look like a turkey and you will wearing Beats headphones. They’re usually sported by douchenozzles. I think this is ploy to get scamdung to fork over $20 billion to stay ahead of Apple.

  5. Not to mention that everyone here saying beats headphones are crap? Don’t agree with that. Audio wise their sound blows anything apple makes out of the water. Their physical design is the problem. Easy to break , cheap plastic etc

    1. well if the build quality is shite, then who cares about the sound quality. Like my stuff to last and give good sound. Hence my choice of Sennheiser.

  6. THis is a stupid move if it does happen. Dont think and company that makes headphones is worth 3.2 billion maybe a BOSE but beats..come on TIm cook dont do it.

  7. This piece of Samsung propaganda-drivel is designed to plant in the mind of the masses: ONE: Apple’s leader is weak and timid to do anything big (punchline end of second paragraph, TWO: Apple/itunes is uncool while Samsung is now so-cool like a mighty blood thirsty tiger on the prowl savaging/annihilating the Apple brand/iPhone with its incredible marketing prowess (punchline end of second paragraph), THREE: poor Apple is lost and desperate without Steve and is no longer the innovator/leader on the bleeding edge frontier of technology’s advancement—a shadow of its former self— you’re now looking at Samsung. (punchline end of third paragraph). Such manipulative drivel! MDN, you should have a propaganda warning sticker on such articles.

  8. I can see the point I guess. How often have we heard people go on about Apple needs to buy some lame brand like Dell et al to sell stuff under a different brand to reach out to the mass market. This could in theory be a much better idea if it goes beyond the streaming (which surely it must considering the price) whereby it has a high profile brand which has a following amongst the right sort of following through which Apple as an inevitably ageing brand as time passes can use for all manner of non main stream products while improving the quality of Beats products along the way while not impinging upon Apples own brand should they be set at a slightly lower level than one would expect from apple itself to make them a little more affordable. It gives Apple potential flexibility that taking over few other brands could offer. Like it or not Apple is becoming a brand for older more sophisticated consumers over the youth market it created in the early days of the iPod. Kids don’t like to support the brand their parents were into a problem Apple used to have with its computers when it totally neglected gaming for so long and teenagers saw it as the computer their ‘conservative’ parents used.

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