First published by 9to5Mac, here is Tim Cook’s internal memo to Apple employees regarding Beats acquisition, verbatim:
Team,
This afternoon we announced that Apple is acquiring Beats Music and Beats Electronics, two fast-growing businesses which complement our product line and will help extend the Apple ecosystem in the future. Bringing our companies together paves the way for amazing developments which our customers will love.
Music is an important part of our lives and our culture. Music has the power to inspire us, to comfort us, and to send our emotions soaring. It brings people together and transcends the limits of spoken language.
Apple’s history in music began with selling Macs to musicians. That remains important to us today, but we also bring music to hundreds of millions of customers with iTunes, which is at the forefront of the digital music revolution. Music holds a special place in our hearts at Apple, and we know that we can make an even bigger contribution to something that is so important to our society. That’s why we have kept investing in music and why we’re bringing together these extraordinary teams — so we can continue to create the most innovative music products and services in the world.
Beats co-founders and music industry pioneers Jimmy Iovine and Dr. Dre will join Apple, along with their team of employees. Jimmy has been on the cutting edge of innovation in the music industry for decades, including as a key partner for Apple in the launch of the iTunes Music Store more than ten years ago. He has produced or collaborated with some of the most popular artists in history, and been an important contributor to the success of the iTunes Store.
Beats Music was built with deep respect for both artists and fans. We think it’s the first subscription service to really get it right. Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas. The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music.
The Beats Music team will report to Eddy. The teams will be getting to know each other better in the weeks ahead, and we are very excited about the possibilities for the future.
Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores. We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership.
Please join me in welcoming Beats to Apple. I hope you are as excited as I am about this new chapter in our history.
Tim
Related articles:
It’s official: Apple acquires Beats Music and Beats Electronics for $3 billion – May 28, 2014
Apple reportedly cuts $200 million off Beats purchase price – May 28, 2014
Why the Apple-Beats deal may be dead – May 27, 2014
Has Dr. Dre’s drunken boast cost his company $3.2 billion? – May 24, 2014
Apple might buy Beats Electronics with foreign cash, effectively paying much less than $3.2 billion – May 23, 2014
70% chance Apple’s Beats deal is happening and, if so, it’s a Dr. Dre, Jimmy Iovine acquihire, says source – May 22, 2014
As MacDailyNews already posited, Walter Isaacson thinks maybe Jimmy Iovine will run Apple’s content business – May 20, 2014
Apple strikes a new chord in the future of music with Beats acquisition – May 18, 2014
How Tim Cook buying Beats is like Steve Jobs buying SoundJam – May 18, 2014
Apple’s $3.2 billion Beats acquisition may not be finalized until next week – May 15, 2014
Monster CEO sounds a little bitter over Apple’s planned $3.2 billion Beats acquisition – May 14, 2014
Ben Thompson on possible Beats buy: Is Apple losing what makes Apple, Apple? – May 13, 2014
Nolan Bushnell: Beats is a ‘good deal for Apple,’ but it says Apple is ‘not an innovative tech company’ – May 13, 2014
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– May 12, 2014
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“The Beats Music team will report to Eddy” who has been unable to get any meaningful deals signed since Steve Jobs left the planet. Barack H. Oblahblah is a more effective leader than Eddy Cue.
“Beats Music was built with deep respect for” deep bass, treble be damned!
“Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores.” Note that I did not mention “quality” in fidelity or construction.
Well MP3 digital recording is also crap, but look how well it has fared over the past decade. The masses don’t care about fidelity. That should be obvious. One can hope that Apple’s engineering can rub off on the Beats products. There is no denying that they are popular.
… and their buying power and influence with suppliers should help no end.
The negga made it, very very disappointed with this outcome 😪😡
I’m going to buy me some them Bose… you know what I saying
You cannot respect music and use those shiteous headphones.
There was a splash heard in the south San Francisco Bay today and it sounded like a shark jumping.
As a shareholder and customer I am pissed.
Good God, I think we have found common ground!
Beats headphones are plastic garbage with pumped up, distorted bass. The absolute anthesis of quality audio. A fad. “A triumph of marketing over quality. wildly overpriced garbage” (to quote MDN) that, now, by association, taints Apple’s brand and lends significant credence to those who claim that Apple’s Macs, iPhones, iPads, and other products are also wildly overpriced and overrated marketing creations.
Maybe to some very small minority. Tell that to the people who are paying the big bucks in droves for that brand.
I’d bet that an even smaller minority of Beats headphone buyers actively compared Beats’ sorry-ass lineup with other far superior products; most purchased those pieces of garbage on the basis of hype and hype ALONE.
Some might say that about Apple products. It’s a very strong argument for acquiring the brand.
Some do say that about Apple, in fact promote it in a disparaging way, as if fashion, brand identification, and marketspeak were some kind of cheat in merchandising, instead of the fundamentals they actually are in the sales game.
Beats are at best a fashion accessory. Fashion changes and the underlying tech/audio excellence isn’t there to back it up. So it a pile em high and flog them quick strategy before the fashion moves elsewhere.
A few years ago when the iPod ruled the world there were swarms of people on the tube and elsewhere with their white Apple earbuds – again as a fashion statement as much as anything else. Nowadays, with millions more sold you see less of them.
Agreed, it is clearly fashion/brand because much better alternatives exist. While I still see EarPods constantly, it appears the trend-setters have replaced them with Beats.
The trend setters are the first ones to go over the cliff.
Apple has always been about quality, about performance and there was always substance behind the brand.
Beats is crap marketed to sheeple, hipsters, hangers on and wannabes by thieves who ripped off the people at Monster who did the work. As someone who has been a musician almost all my life, this is an insult.
What the waste of $3 billion means is that Tim Cook’s team is clueless as to the way forward and that Apple is nothing but a brand to be exploited for cash.
If I were a director I would ask Cook to resign and tell him to take the fools who approved this with him.
“Apple is nothing but a brand to be exploited for cash”
Since Apple is a publicly-traded company this is actually fairly important. Yes, this may not make sense to those who have a deeper appreciation of music or who know anything about the quality (see other MP3 comment), but this is a big brand grab and a big win.
Board approved this deal. TC has no power to consummate such mergers without BoD approval.
No other words need be said…
When you watch any sporting event and see those headphones on the athletes I cannot comprehend your shareholder angst.
Not the best audio fidelity? Sure, but that has nothing to do with the astronomically popular brand.
Wal-Mart is popular as well, but I don;t see Apple buying them.
Let me know when you see Wal-Mart on every NFL player’s head before a game and I’ll take up your analogy.
The fact that they are on every NFL players head (they are not, by the way) matters because……?
Wal-Mart is not an aspirational brand. There is a difference between well known and asiprational. Beats have rapidly achieved the aspirational status (not yet near the level of Apple, or even BMW), but it is definitely in that group.
As a shareholder and Customer, I am very happy. I believe in Apple management’s foresight and the path they are on.
“Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores.”
The biggest reason Apple bought Beats.
Musicians do not use Beats. Rappers maybe, but not musicians.
I believe you have hit on it. Tim Cook is a numbers guy, we knew that but failed to stop and think what that implied. Which is that Cook doesn’t meditate before making an acquisition, or pray to Vishnu; he moves in directions motivated by the hard numbers.
Well, you’re right about Tim. He obviously didn’t contact John McLaughlin and Mahavishnu, speaking of the ultimate in real talent. Just sayin.
Ah yes, The Dance of Maya 🙂
“We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership.”
Let’s hope so… after all, they can only get better.
I’m a little torn hear (see what I did…?).
On the one hand, I don’t do Beats often (I tried in the store, but everyone was watching), yet on the other, I hope Apple has some technology they are hoping to slip into some smaller in-ear or on-ear sets. That would explain why they are buying the NAME (with the hopes of improving it…) while at the same time upping their game in the iTunes streaming arena.
Meanwhile, I’ll continue enjoying my Beyerdynamics (“now there’s a nice set of cans”…[-Lindsey Lohan’s father]) while Apple’s Eddy attempts getting Beats off the low-end by pumping up the high-end…;-)
I totally agree with your sentiment. I personally would never buy Beats headphones with their low-quality sound at a ridiculous price, but perhaps Apple will improve the quality and introduce some less gaudy models that aren’t purely intended as fashion statements. I don’t consider myself to be an audiophile, but I do like balanced sound (i.e. no overpowering bass).
I don’t really know what to make of this acquisition, but I’m hoping for the best.
To those who complain about the quality of Beats headphones: you know, Apple has been making earbuds with their logo on them for years. In fact, there are far more Apple earbuds out there than Beats headphones. If Apple really cared about quality sound, their earbuds would sound better. This proves to me that Apple really doesn’t care about the headphone aspect of this deal. Not to say that they won’t be working to improve them.
The difference is that Apple only sells low-end sub-$100 earphones that sound good, but certainly not great. If Appel sold premium headphones like Beats then I would expect the sound quality to improve. If not, then I would dislike those theoretical Apple headphones as I dislike Beats headphones (though not as much due to the ridiculous bass-heavy Beats sound).
MP3s are compressed and the Solo line of Beats headphones emphasizes the bass to bring back what was lost through compression. No they are not studio monitors but they are not intended to be. Studio monitors only highlight the imperfections in highly compressed audio.
I’ve listened to the entire Beats line-up vs. my Audiio Technica ATH-M50X headphones which to me represent better value, but my girlfriend wouldn’t be caught dead wearing them to the gym. She loves her Beats Solos and uses them 6 days a week at the gym. To her they are the best sounding headphones she has ever owned. She listens to compressed 128kbps MP3 workout podcasts. This is where these headphones shine.
It can be argued that Harley Davidson, Nike, Gucci are all a rip off, but there is still value in a brand. If not we’d all buy no name.
I’ll say it again. Beats headphones are fugly and are merely a quieter equivalent of the ’80s boom box. Spend the bucks and get Etymotic ear buds.
I thought Dre got drunk and the deal was off? Anyone with half a brain knew that story was a joke…
That story was real. The video that he was a part of has been uploaded to the Internet for all to see. It just didn’t play out with the deal going dead.
I meant the fact that apple would actually let Dre being drunk affect their business decision…they are smarter than that
The headphones will obviously get improved and brought to Apple’s audio quality standards and fidelity like the iPod, now that Apple calls the shots.
There’s no doubt about it .
Whatever the history between the beats guys and apple, they paid well over the price for that company.
Reading between the lines, this email says to me that Apple couldn’t work out their own music subscription solution.
Dre and Levine are amazing guys, but they ain’t worth $2 billion or anyone’s money.
Levine? I just had a flashback to when Case teamed up with Levin when Aol bought Time Warner.
3X sales was cheap. How many times sales did Google pay for Nest Didn’t Nest just have a massive recall on their one of their detectors. Nest attaches a wifi connection to a $10 smoke or CO detector and sells them for eel over a $100. GOOG paid $11 B for an unprofitable Motorola then pissed away a few hundred million more before selling t at a loss. Apple says earnings accretive for 2015 which means in its fist year because the deal won’t c;ode until late Q4 2014.
Not sure which is worse sound quality, Beats or Bose? Both are dreadful. At least Beats has a lot more brand value cache than Bose does anymore.
Bose headphones actually sound good.
Not great, but good.
Beats don’t….so there.
What? They will report to Eddy, but will bring grate products under Phil’s leadership.
Headphones Shmeadphones! Good Lord, this site is filled with dunderheads! It’s the Beats streaming, human-curated music, along with Jimmy Iovine’s/Dre’s connections they are buying. It’s brilliant and will make iTunes the King of Music forevermore. People, PLEASE get a clue. Sheesh. (NOT…about headphones)
Correct, it is not solely about headphones but it is a big part of it; the visible brand sitting on top of Richard Sherman’s head in place of Apple’s EarPods.
Look, Cook just bought the headphone company too. If he didn’t want the headphones, as you insinuate, he’s got them now. What Apple is going to do to turn around a bling-focused “audio” company with overpriced low-fidelity noisemakers is anyone’s guess. But don’t pretend that the hardware wasn’t part of the deal. Cook got played hook, line, and sinker.
Exactly.
Beats headphones is a niche market (perhaps a very large niche?). This is all about Iovine, streaming (audio and video) and revenue streams that will survive the demise of purchased recorded music.
Even though I am not a big into their headphones, I am diving into their music service to see if I can get into it. So far I don’t see much difference between it and spotify. So, why say it is doing the best in music service? Guess it will take a while to find out for me. I don’t like being able to share my playlist to others…but most all of the services do this….
Stupid auto-correct. “I DO like being able to share my playlist to others…”
I miss Steve’s brevity.
“Music is an important part of our lives and our culture. Music has the power to inspire us, to comfort us, and to send our emotions soaring. It brings people together and transcends the limits of spoken language.”
Ugh? i mean.. sure, but … writing like this is close to soulless managementspeak but with a Jobsian peaceout twist.
“Music is an important part of our lives and our culture. Music has the power to inspire us, to comfort us, and to send our emotions soaring. It brings people together and transcends the limits of spoken language.”
Of course it can, but it can also be used by some people to shut themselves out of the world, and then walk head on into plate glass windows. “just saying”
Remember the smartphone map comparing iPhone vs Android ownership in NYC and Newark, NJ ? Regardless of any other benefits of this deal for Apple, the Beats acquisition might also serve as a catalyst to move entire cities like Newark NJ over to the Apple iPhone camp. That would be cool.
Anybody else think that by getting Iovine and Dre they are about to become their own music studio, cutting out the studios and making music directly with artists? Imagine the potential shift in the industry if that were the case. Don’t deal with content providers, become the content provider. If so, that is worth $3 billion.
A good an interesting article.
Thanks for the info.