MUMBAI: Apple Inc. is reportedly set to acquire Beats Electronic for a whopping $3.2 billion, which could make it the biggest deal till date for the tech giant. Although no official announcement has been made as yet, the acquisition could be revealed as early as next week. Talks between Apple and Beats are said to be in progress, but reports say that the deal could fall apart just as easily due to final details.
Beats Electronics, which was co-founded seven years by rapper-producer Dr. Dre and music mogul Jimmy Iovine, has become rather popular. Since launching the original Beats Studio model for $300 in 2008, the company has launched several other headphones with a little help of some big names including Lady Gaga, Justin Bieber and LeBron James. Earlier this year, the company launched a premium music streaming service- Beats Music.
The deal could most likely include Beats’ hardware business and the company’s music subscription service. Should the deal go through, it might be a little ironic, considering the reason behind developing Beats Audio. When first launched, both Dre and Iovine stated that the introduction of MP3 and iPod brought about a decline in sound quality. Iovine, who is also chairman of Interscope/Geffen/A&M records, said that people had sacrificed sound for the sake of speed and convenience.
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Apple has long been rumoured to enter the music subscription business, however, there has been no sign of that happening until now. Despite the company’s very own iTunes store falling 13 per cent in terms of downloads since mid-March, it has managed to maintain its multi-billion dollar returns.
This is Beats’ second partnership with a phone company. In 2011, HTC Corporation bought half of Beats for $300 million, after which the Beats Audio technology was integrated with HTC cell phones. However, Beats bought back all the company’s shares from HTC last year, and reportedly got an investment of $500 million from The Carlyle Group.
