Apple acquires Beats for $3 billion

Apple on Wednesday said it agreed to acquire Beats Music and Beats Electronics for $3 billion. As part of the acquisition, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple.

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Tim Cook, Apple’s CEO. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”

The two Beats entities make headphones, speakers, audio software, and the subscription streaming music service.

“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”

In my opinion, Jimmy is going to play an important role going forward. Maybe not that you always see, but he’ll be there.

  • I reckon they’ll kill the Beats brand within 18 months.

    I’d guess the visibility of those white Apple headphones – which were everywhere between about 2004 and 2011 – was worth a lot more in terms of advertising than billions of dollars worth of billboards, TV and magazine ads.

    There’s a reason why all iPods came with those free headphones, and that they stood out from the crowd – no other headphones at the time came in white. After a while Apple’s ads relied on the headphones as branding – remember those dancing silhouettes?

    Say what you will about the quality of the Beats product, but I’m sure Apple has data that finds young trendsetters nowadays are more likely to be seen out in public wearing Beats than Apple headphones. From a mindshare point-of-view, it makes sense to take over the brand that’s blocking one of the easiest ways for you to acquire consumer awareness.

    • so much for your theory. 4 years later: Beats brand is alive and strong.

  • Commenterio

    I guess this means no more Beats technology in Android photos, as seen from HTC.

  • Ryan Simmons

    The BBC just linked to Jim Dalrymple. Good on them.

  • BongBong

    This is the craziest thing Apple has ever done.

    • yes, because black male consumers = guns.

      dear lord.

      • BongBong

        No, because Dr. Dre was in NWA. Ever heard of them?

        • JohnDoey

          Now get a free Glock with every

          Beats purchase.

          Why is it that every single article about Apple buying Beats has a racist f’ing comment on it like this?

          And further down the thread, the person who makes the racist statement then denies it was racist, citing some weak sauce evidence.

          because Dr. Dre was in NWA. Ever heard of them?

          There it is.

          Next, you will be calling the person who called you out on your racism a racist. That is the last refuge of the bigot.

          Your racism is pointless and disturbing.

          And there it is.

          NWA was a music group that made music and poetry. Not a gang, not a terrorist organization.

          What has NWA got to do with Apple buying Beats? Nothing. Not a single thing. Apple buying Beats doesn’t even have much to do with Andre Young’s successful solo career after NWA.

          As far as Andre Young (whose stage name is Dr. Dre) is concerned, Apple bought Beats because Mr. Young has been a successful consumer electronics entrepreneur for 7 years now. Steve Jobs was also a successful consumer electronics entrepreneur. Andre Young started Beats. Steve Jobs started Apple. The idea that Apple and Beats don’t belong together is really strange. I don’t understand why you don’t see the commonality there. Both companies are even based in California.

          This is the craziest thing Apple has ever done.

          Why? I don’t get why you think it is crazy.

          Beats makes the most popular line of consumer headphones. Apple makes the most popular line of consumer music players. The 2 products actually plug together to work. The 2 company’s products actually plug together to work.

          Beats is run by one of the most successful music producers in history (Jimmy Iovine) and one of the most successful music artists in history (Andre Young aka Dr. Dre.) Apple is a musical instrument maker who makes the most popular professional music production computer (Mac,) the most popular professional music production software (Logic) as well as the most popular consumer music production computers (iPad/iPhone) and the most popular consumer music production software (GarageBand) as well as the most popular music playback hardware (iPod) and the most popular music playback software (iTunes.) It is very likely that at some point, both Iovine and Young worked on a music project that was made entirely with Apple products, and then they listened to that project entirely with Apple products. That is a common thing to happen in music studios, which are filled with Macs, iPads, iPhones, iPods, Logic, GarageBand, and iTunes. And Beats headphones.

          Beats has the music subscription services with the largest selection of music (Beats Music,) and Apple has the music download service with the largest selection of music (iTunes Store.) Put them together and you can offer the consumer a subscription listening service from which they can collect and keep their favorite tracks for a lifetime with 1 tap, as they listen.

          The HD music era is just beginning. We will soon move from listening to CD era 16/44 audio files to listening to HD era 24/96 audio files, which is the kind of digital music you find in a music studio (where Iovine and Young have spent many years working.) Enabling the HD era is part of Beats’ mission, and Jimmy Iovine has been talking about HD audio and promoting it within the music and technology industries for more than 5 years now. He has been asking which technology company will lead on this for more than 5 years now. Apple’s iTunes Music Store has also been promoting the oncoming HD music era for years now, collecting HD music masters under their Mastered for iTunes program. Iovine promoting HD audio to other music producers and Young promoting HD audio to other artists will only make Mastered for iTunes and HD music happen faster. Apple wants it to happen fast because all the subscription services that are cutting into iTunes Music Store sales are streaming 16/44 audio and as streaming services, they don’t want to move to the much larger 24/96 files. The 24/96 files give you a reason to download your favorite songs again, because the downloads will once again be too big to stream. HD audio gives iTunes downloads a second life. So by buying Beats, Apple has essentially answered Iovine’s question of which technology company will lead on HD audio by saying, “It will be Apple, and you will be heading it up from within Apple.”

          HD music also needs hardware support. Macs have had built-in HD audio for many years, and iOS devices will either get built-in support for HD or support for HD audio accessories that plug onto Lightning. For example, a set of Apple Beats headphones with a 24/96 decoder built into them and a Lighting plug on the end of the cable. That would be the perfect way to enable all the existing Lightning-compatible devices (iPad 4, iPad Air, iPad mini, the latest iPod nano, and iPhone 5 or later) to playback HD music.

          Further, the “Beats” brand is compatible with Apple’s marketing efforts. Same as when Apple bought the famous Logic music production software and turned it into Apple Logic, they can turn the Beats products into Apple Beats.

          So rather than being hard pressed to see a reason why the Apple/Beats deal makes sense, it is actually hard to find a way it does not make sense. The founders are similar, the current hardware products plug together, the music production connections are the same, the music retailing services complement each other, the future HD products complement each other, and the branding is even complimentary.

          So I would love to hear why you think the Apple/Beats deal is crazy other than “NWA!” which makes no sense.

          And try to explain it to me as though Andre Young is a member of the same race as Tim Cook, because he is: human race.

          • monkeyrun

            Lol if apple is at all interested in beats headphones they would’ve bought monster instead.

          • monkey – except for all the other things JD said which are in addition to headphones, and which Monster has no value in. conveniently ignored by you. because, lol.

          • monkeyrun

            Honestly don’t have the time to read all that. Give me a tl;dr version.

            I know exactly what Apple want from this, and it’s simply sad. 3 Billion for the low low rate music license contract. I am sure they will make their money back, but it’s sad.

            Apple used to be the “knight in shining armor” who’s supposed to be helping the artists with iTunes Music Store. Now they are just buying some me too subscription service that pays almost nothing to the musicians.

          • bravo, JD. the best, most coherent post on this ive seen anywhere.

          • BongBong

            Brevity is the soul of wit and of good writing. You are trying too hard to defend an incongruous business pairing.

        • Your racism is pointless and disturbing.

          you have that backwards — by suggesting a Glock will be sold w/ every beats purchase makes you the racist, racist.

          • BongBong

            Utter nonsense. Race plays no part in the issue. He was in a gangster (“gangsta”) rap group, which was famous for their violent lyrics. If you cannot connect those dots, you cannot be helped.

  • hexx

    I just hope they improve sound quality – don’t mean to offend owners of them but they sound like s**t… Oh yeah and get a rid of that Dre twat.

    • JohnDoey

      The cheap Beats don’t sound great, but the expensive ones really do. The expensive ones have amplifiers in them that make them much louder and much bassier.

      The knock on the expensive Beats is that they don’t reproduce sound in a transparent way, with a flat frequency response. However, it is techies who make that complaint, and they don’t know WTF they are talking about. Audio producers don’t want their listeners to have the same transparent/flat headphones that we use in the studio, because the consumer does not have the same music that we listen to in the studio. Audio producers want you to have headphones with exaggerated bass and treble that improves the listening experience of CD era audio, which is sort of just a shadow of the actual HD audio from the studio. In the near future, consumers may be able to buy HD audio masters that are essentially the same music from the studio, and which are specifically mastered for transparent/flat speakers/headphones. But for now, consumers do not have that music. They have CD era music that is just a part of the actual studio master, and the listening experience is dramatically improved by bass-heavy speakers or headphones.

      I work in a music studio and use Sony headphones there while I’m working, because they are transparent/flat and they are plugged into an amp that is transparent/flat and playing back HD quality music (24/96) that is under production and we need to hear it flat. But when I listen to music with an iPod or iPhone, which puts out a much software music signal, and only plays back CD quality music (16/44,) I have a set of Beats Studio headphones that have an amplifier in them that exaggerates bass and makes the iPod/iPhone much louder. That idea is beyond many technical/computer people (other that music technical people) because they see everything as either on or off. They don’t understand the subtlety of art or music. They think there is only one best headphone for all circumstances, and the quality of it should only be measured with an oscilloscope or other diagnostic tools. No. The quality of a music experience is measured with the ears and the brain of the listener who is experiencing it.

      But I have to admit, when a friend bought a cheaper set of Beats that didn’t have an amplifier in it, I was amazed at how much worse they sounded. But that is true of every headphone you plug into an iPod/iPhone or similar consumer music player, unless the headphone has an amplifier in it. Changing that situation is not possible for Beats alone. Changing it is not necessarily possible for Apple alone. But Apple combined with Beats have all the puzzle pieces to fix that, and enable a consumer HD audio era where music is mastered in the studio for HD playback, sold as HD audio files, played back by consumer HD audio hardware, and listened to with headphones/speakers that were designed to reproduce HD audio. End-to-end consumer HD is one of the most exciting things that may come out of Apple/Beats.

      Right now, people complaining about the sound quality of CD era consumer audio gear (iPods/iPhones, Beats headphones, and similar competing products) is like people talking about how great it is to get 38 miles per gallon from their gasoline car while a Tesla cruses by them, getting the equivalent of 100 miles per gallon. The CD audio is not really good enough to criticize, it just has to be replaced entirely. Like gas cars and other obsolete antiques.

      If you imagine a future set of Apple Beats headphones that have a Lightning cable on them and an iPhone playing Mastered for iTunes HD music, that combination would get easily 100x the sound quality of any of today’s consumer playback hardware.

      So if you don’t like the sound quality of Beats headphones, then encourage Apple to buy Beats.

    • websnap

      I have the new Studio Wireless cans and they are fantastic. Way better sound signature without the inflated low end.

      What did Dre do to you? He seems alright besides the video some one else posted of him celebrating his success – something every single one of us would have done. Hell, if I got hired as an Apple executive – never mind how much money I would make from the sale – I would definitely celebrating with my friends as well. Keep in mind he didn’t post it and I’m sure he had a hand in making sure it came down once he knew it got posted.

      • SDR97

        I can’t say I’ve followed Dr. Dre at all but some other sites have pointed out that he has a rather troubling history of violence against women (e.g.

        So, you know, I think criticism is at least fair game.

        • websnap


      • BongBong

        If I had an unannounced deal with Apple and I had signed an NDA, I’d honor that. Iovine and Dre seem like scam artists to me.

        • websnap

          They both honoured their NDA (if they signed one and I’m sure they did). Tyrese recorded a video and posted it and (it seems) Dre got him to take it right down.

          Saying they seem like scam artists is a huge leap if you don’t know them. People make mistakes (in the context of the video). It didn’t even have anything to do with Iovine.

        • Moeskido

          Funny. I always felt that way about Stephen Elop, Thorsten Heins, and Vic Gundotra. Just to name a few.

  • Congrats!

    • John V.

      Congrats to whom? Apple lost 3 billion dollars and Beats lost all their cool.

      • taitaisanchez

        Jimmy and Dre.

        Still, if this means better and cheaper choices in the iTunes store and maybe better and cheaper Beats(I’d love to see what Beats by Jony look like)…

      • Congrats to Apple for buying a service better than and complimentary to their own [iTunes Radio] as well as adding a new hardware line which surely they will improve on the build considerably to make it a top notch hardware product.

        Congrats to Beats employees for getting 3B and some in stock, which could end up being more than the current value. They get bought by a like-minded company and their service will instantly get millions of subscribers once it is bundled with iOS 8 [if that happens].

        There are no losers in this deal. Both get something pretty sweet out of the deal, even if you’re too biased or blind to see it. As Cook said, this is about the future.

  • taitaisanchez

    How much longer until Samsung tries to one up Apple by buying Skullcandy or Koss?