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Apple Buys Beats for $3 Billion

After weeks of speculation, it’s official: Apple is acquiring the Beats Music streaming service and Beats Electronics, maker of highly popular premium headphones. Apple expects the deal to close in Q4 2014 for a total of $3 billion — slightly less than the originally rumored $3.2 billion (see “Why Would Apple Drop $3.2 Billion on Beats?,” 9 May 2014).

Apple’s press release makes it clear that the deal is all about music. “Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Apple CEO Tim Cook. “I’ve always known in my heart that Beats belonged with Apple,” said Beats co-founder Jimmy Iovine. We almost expected to see little heart icons splashed across the press release.

Interestingly, the press release hints that Beats will keep its own unique branding, separate from Apple’s, something that seldom happens with Apple acquisitions. “The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years,” said Eddy Cue, Apple’s senior vice president of Internet software and services.

Not only does Beats Music appear to be sticking around, its iOS app was updated to version 2.1.0 on the day the deal was announced, doubling the free trial period to 14 days and dropping the annual subscription fee from $119.88 to $99.99. In an internal memo to employees, Tim Cook emphasized the importance of Beats Music in the deal, saying, “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.” (We predicted that sentiment in our pre-deal coverage of Beats at “FunBITS: What Sets Beats Music Apart,” 16 May 2014)

Jimmy Iovine, a legend in the music business, will be leaving his position as chairman of Interscope Records to work full-time at Apple, and Beats co-founder Dr. Dre said he would do “as much as it takes” for Apple while continuing to produce music. According to a quote in The Wall Street Journal, Iovine said the two men’s titles would simply be “Jimmy and Dre.”

What Is Apple Ignoring About Dr. Dre? -- Jimmy Iovine and Dr. Dre bring decades of music industry experience and connections, as well as their fair share of cool. But with sexism in the technology industry being such a hot-button topic these days, we would be remiss not to mention Dre’s past history of violence and misogyny.

James Robinson of Pando Daily recounts a violent 1991 incident between Dre (whose real name is Andre Young) and television personality Dee Barnes at a nightclub. Dre later pled “no contest” to misdemeanor battery and settled a $22 million lawsuit with Barnes out of court. Dre faced many other legal troubles in the early 1990s related to alleged assaults, not to mention his numerous songs that feature misogynistic lyrics. However, Dre seems to be on the straight and narrow since marrying Nicole Threatt in 1996.

These actions may be in the distant past, but they’re still troubling. As Robinson says in the Pando Daily piece, “We all know there exists a double standard for celebrity crimes. Behavior that would be career-ending for a ‘regular’ person is somehow accepted as part and parcel of the celebrity lifestyle, particularly in the music industry. Also, there will be some who argue that Young’s transgressions took place over a decade ago, as if there is a statute of limitations on taking pride on beating a woman while your bodyguard holds back a crowd.”

What would the response be if another male Apple executive were found to have such a history of violence? And what sort of message does this send to women in the tech industry? Misogynistic lyrics and actual assault are far beyond the tech world’s usual hand-wringing about models at trade shows and whether conferences have enough female speakers. Perhaps an appeal to “it’s just business” will be enough to brush away such concerns, but if not, Apple is dipping into unfamiliar and likely uncomfortable waters.


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Comments about Apple Buys Beats for $3 Billion
(Comments are closed.)

TattooedMac  2014-05-28 19:06
Not even considering, 'who' Dre is and his outlandish behaviour towards women, I really don't know what Apple wants with this company.

The headphones that hold the Dr Dre icon, are some of the worst in the industry, and to top if off, the most expensive for what they are.

I don't personally own a set, but have use a friends for a day, and have to say, that they are really bad. There is no distinguishable mark between the High's, Low's and Mid's in the sound. The pair I used where tinny and the sound was crap. The bass was too high, and drowned out most other instruments and I really had to take them off after a short while.

You can also go to any, (and I mean ANY) forum or review site, and see they get 2 Stars and bad reviews as well. So what does Apple want with a company that has such a bad wrap ??
3 Billion to me, seems too much !!! Is it JUST for the Streaming service ?? Why as I think iRadio is great !!
I hope they get rid of the headphones, otherwise Apple as a brand will suffer an unnecessary hit in reputation. I find myself doubting about future Apple hardware now that they have openly embraced such a subpar and overpriced brand.

Aside from selling things at a premium, Beats and Apple are completely different... build quality, costumer support, attention to detail, you name it.
Steve Nicholson  2014-05-29 08:57
I tried the Beats streaming service for the trial week. After it played the same song three times in a row I deleted it from my iPhone.
Worst move by Apple, ever.