Apple in talks to buy Beats Electronics for $3.2B
Apple is in talks to buy Beats Electronics, a maker of headphones and provider of a music streaming service, for a reported $3.2 billion, making it the largest acquisition in Apple's history, the New York Times reports, citing sources familiar with the negotiations.
A deal could come as early as next week, according to the Times' sources.
Founded by rapper Dr. Dre and music executive Jimmy Iovine, Beats Electronics supplies Beats by Dr. Dre headphones and launched a music streaming service in January as competition for Spotify and Pandora. The acquisition could signal a shift in Apple's music sales strategy away from the iTunes store download model and toward streaming music.
"The age of digital downloads is basically over," Aram Sinnreich, a media professor at Rutgers University, tells Bloomberg.
Apple has been on an acquisition tear recently, having acquired 24 companies in the last 18 months, CEO Timothy Cook told analysts in the firm's latest earnings call. But none of the earlier deals match the scale of the Beats buy.
"We are expanding Apple's products and services into new categories, and we are not going to underinvest in this business," Cook was quoted by the Times as saying during the earnings call.
In 2013, private equity firm Carlyle Group invested $500 million in Beats, which valued the company at over $1 billion. The firm's annual sales are estimated to be more than $1.5 billion.
Apple's possible purchase of Beats "would have to fit into a much longer, more innovative strategy around perhaps the hardware and the service," Ben Bajarin, a consumer technology analyst for Creative Strategies, tells the newspaper.
- read the Times' article
- check out the Bloomberg story
iPhone 5s top seller in U.S.
Apple pulls experts from medical field to reportedly work on iWatch
There's gold in them thar 800M iTunes accounts