“Apple Inc is close to paying a record $3.2 billion for Beats Electronics, two people with knowledge of the matter said, an expensive foray into music streaming and headphone gear that would mark a departure for the usually cash-conservative iPhone maker,” Nadia Damouni, Christina Farr and Nicola Leske report for Reuters. “Both companies are hashing out details and the envisioned deal could still fall through, one person told Reuters on condition of anonymity because the discussions were private.”
“A second source familiar with the matter told Reuters that Apple was in the market for a subscription-based music service to complement its ‘iRadio’ ad-based offering, launched in 2013 as part of an attempt to jump into a music-streaming arena then split between a handful of startups such as Pandora Inc.,” Damouni, Farr and Leske report. “Founded by rapper Dr. Dre and legendary music producer Jimmy Iovine, Beats Electronics is best known for its ‘Beats by Dr Dre’ line of trendy headphones that vie with the likes of Skullcandy Inc, Sennheiser Electronic and Bose Corp. This year, it launched a music service that has won plaudits for its slick design and human music curation, versus the computer-algorithms that determine playlists for most of its rivals.”
“But analysts on Thursday questioned whether Beats, valued at just $1 billion during its last funding round in September, was worth that price,” Damouni, Farr and Leske report. “Apple-watchers have speculated that the company that upended the music industry – and today is the single largest seller of tunes – was contemplating a Spotify-like on-demand music service to go with iRadio service and iTunes. ‘This is really puzzling,’ said Forrester analyst James McQuivey, who said there was huge overlap between the two companies’ customer base. ‘You buy companies today to get technologies that no one else … or customers that no one has. They must have something hidden … under the hood.’
Damouni, Farr and Leske report, “Apple’s Chief Executive Tim Cook met with Iovine, the Beats CEO, last year on a potential partnership involving Beats’s planned music-streaming service, Reuters reported in March, citing sources.”
Read more in the full article here.
MacDailyNews Take: This thing is getting more real with each passing second.
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