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Apple to Buy Beats Music and Beats Electronics for $3 Billion

By - Source: Tom's Hardware US | B 24 comments
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It's official!

Apple has confirmed long standing rumors that it plans to acquire Beats Electronics. Confirmation comes via Apple CEO Tim Cook, who released a statement via Apple's PR department. Cook highlighted the importance of music to Apple, and Beats co-founder Jimmy Iovine says that he had "always known in his heart" that Beats belonged with Apple.

"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."

Certainly, Beats and Apple are both prime examples of a company leveraging brand loyalty and culture to move inventory. Now,  Iovine and co-founder Dr Dre will join Apple, though the details of their roles in Cupertino remain unknown.

The deal is valued at $3 billion and actually covers two companies, Beats Electronics and Beats Music. The latter is the subscription music service that launched earlier this year. When this news first came out earlier this month (Financial Times had it first week of May), we figured the Beats Music service might be the real reason Apple was after Beats. Sure, the Beats Electronics brand is strong, and Apple has sold Beats audio products in its stores for years. The company sells music through iTunes and runs iTunes Radio, but Apple no doubt wants to snag the folks who are willing to pay a subscription every month to listen to all the music they want.

Follow Jane McEntegart @JaneMcEntegart. Follow us @tomshardware, on Facebook and on Google+.

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Top Comments
  • 17 Hide
    notherdude , May 28, 2014 3:33 PM
    I don't get Beats. Seems like all brand and no substance. I guess these companies deserve each other in a way. Apple really seems to be reaching for its lost mojo and I wager they wont find it here.
Other Comments
  • 17 Hide
    notherdude , May 28, 2014 3:33 PM
    I don't get Beats. Seems like all brand and no substance. I guess these companies deserve each other in a way. Apple really seems to be reaching for its lost mojo and I wager they wont find it here.
  • 9 Hide
    edogawa , May 28, 2014 3:41 PM
    Unless you like tons of bass it's over rated garbage. At least there is some value in Apple products, beats...not so much. Apple might be trying to stay relevant as they are not innovators.
  • 7 Hide
    nukem950 , May 28, 2014 3:45 PM
    So. Does that mean that they are going to be renamed to iBeats?
  • 13 Hide
    FFH , May 28, 2014 3:54 PM
    Much like everything by Beats, this is overpriced.
  • 3 Hide
    NightLight , May 28, 2014 4:43 PM
    i just don't see how they can make any profit on it after 3 billion in purchase price... I mean...
  • 9 Hide
    alz_solstice , May 28, 2014 5:17 PM
    Later, we will see an iPhone/iPad/MacBook/iPod with Beats audio and Beats headset. This is going way more OVERPRICED.
  • 3 Hide
    stridervm , May 28, 2014 5:20 PM
    This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....
  • 3 Hide
    house70 , May 28, 2014 6:32 PM
    Quote:
    I don't get Beats. Seems like all brand and no substance. I guess these companies deserve each other in a way. Apple really seems to be reaching for its lost mojo and I wager they wont find it here.

    A match made in "heaven", indeed.
  • 0 Hide
    notherdude , May 28, 2014 6:39 PM
    Quote:
    Quote:
    This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....


    Apple has 18% of the mobile market share... the laymen (or fandboy) will say that's tiny. Apple pulls 18% with a dozen products... Android/Google/Samsung pulls 80% with 1,000+ different devices. Apple must be doing something right.


    Apple has done a lot right but not much lately. But it is true that they are not 100% brand and no substance like Monster cables for example, or like Beats. But the extent to which Apple is riding on momentum and knee-jerk loyalty and not on innovative, superior products is getting ever more precarious and sooner or later they will seem passe, among many young tech enthusiasts they are already passe, and this is how they try to get their mojo back?

  • -3 Hide
    wemakeourfuture , May 28, 2014 6:55 PM
    Quote:
    i just don't see how they can make any profit on it after 3 billion in purchase price... I mean...


    Yearly revenues are a billion, this can easily be flipped to a profit faster than many purchases large IT corporations make...
  • 1 Hide
    SamsChoice , May 28, 2014 9:01 PM
    Quote:
    Quote:
    This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....


    Apple has 18% of the mobile market share... the laymen (or fandboy) will say that's tiny. Apple pulls 18% with a dozen products... Android/Google/Samsung pulls 80% with 1,000+ different devices. Apple must be doing something right.


    1) there are not 1000s and BTW, that is called choice! Something you know nothing about.
    2) Samsung alone beats Apple's market share which is around 15%. Once again Samsung offers choice and Apple does not.

    Samsung has been b slapping Apple since the Galaxy S2. Dream on Otacon72!

    Alert to the moderators, KRO2 is Otacon72 who is a highly abusive poster banned under dozens of accounts!
  • 2 Hide
    knowom , May 29, 2014 3:27 AM
    I can see how the two companies fit together under the same roof both are just overpriced hardware aimed at a rich snobs as a status symbol.
  • 0 Hide
    JeanLuc , May 29, 2014 5:22 AM
    So Apple is finally married to it's best friend Beats Audio! I can't help but think of the Queen classic 'Your My Best Friend' when I saw the headline.
  • 4 Hide
    sunflier , May 29, 2014 6:31 AM
    Quote:
    "I've always known in my heart that Beats belonged with any company dumb enough to pay me $3 billion," said Jimmy Iovine.


    /fixed
  • 0 Hide
    wemakeourfuture , May 29, 2014 9:53 AM
    Quote:
    Quote:
    Quote:
    This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....


    Apple has 18% of the mobile market share... the laymen (or fandboy) will say that's tiny. Apple pulls 18% with a dozen products... Android/Google/Samsung pulls 80% with 1,000+ different devices. Apple must be doing something right.


    1) there are not 1000s and BTW, that is called choice! Something you know nothing about.
    2) Samsung alone beats Apple's market share which is around 15%. Once again Samsung offers choice and Apple does not.

    Samsung has been b slapping Apple since the Galaxy S2. Dream on Otacon72!

    Alert to the moderators, KRO2 is Otacon72 who is a highly abusive poster banned under dozens of accounts!



    Apple smartphones have destroyed Samsung's not even a competitions since the S2.

    As a business Apple is a lot better than Samsung, both in profit since the S2 release.

    If you compare high end products to high end products Apple has more marketshare than Samsung. Samsung has more total marketshare because it makes a gizzillion crappy plastic phones for the developing world to buy for cheap.

    Too bad marketshare != dominance. Just ask GM, Chrysler and Ford that had more marketshare than BMW how well did those companies do from 2006-now...
  • 0 Hide
    SamsChoice , May 29, 2014 10:26 AM
    Quote:
    Quote:
    Quote:
    Quote:
    This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....


    Apple has 18% of the mobile market share... the laymen (or fandboy) will say that's tiny. Apple pulls 18% with a dozen products... Android/Google/Samsung pulls 80% with 1,000+ different devices. Apple must be doing something right.


    1) there are not 1000s and BTW, that is called choice! Something you know nothing about.
    2) Samsung alone beats Apple's market share which is around 15%. Once again Samsung offers choice and Apple does not.

    Samsung has been b slapping Apple since the Galaxy S2. Dream on Otacon72!

    Alert to the moderators, KRO2 is Otacon72 who is a highly abusive poster banned under dozens of accounts!



    Apple smartphones have destroyed Samsung's not even a competitions since the S2.

    As a business Apple is a lot better than Samsung, both in profit since the S2 release.

    If you compare high end products to high end products Apple has more marketshare than Samsung. Samsung has more total marketshare because it makes a gizzillion crappy plastic phones for the developing world to buy for cheap.

    Too bad marketshare != dominance. Just ask GM, Chrysler and Ford that had more marketshare than BMW how well did those companies do from 2006-now...


    1) Since the GS2, Samsung had crushed Apple. ALL tech sites rated Samsung flagship phones higher than the iphone. iphone is not even in the top 5! LOL

    2) samsung offers choice. Samsung phones are made of composite materials that are more resistant than apple. They also offer twice the features.

    3) Apple will be in the single digits in marketshare within a year. Market share is slipping away year by year,

    4) Apple is a pinto disguised as a BMW and tech illiterate fools buy it up!
  • 0 Hide
    notherdude , May 29, 2014 10:26 AM
    Quote:
    Quote:
    Quote:
    Quote:
    This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....


    Apple has 18% of the mobile market share... the laymen (or fandboy) will say that's tiny. Apple pulls 18% with a dozen products... Android/Google/Samsung pulls 80% with 1,000+ different devices. Apple must be doing something right.


    1) there are not 1000s and BTW, that is called choice! Something you know nothing about.
    2) Samsung alone beats Apple's market share which is around 15%. Once again Samsung offers choice and Apple does not.

    Samsung has been b slapping Apple since the Galaxy S2. Dream on Otacon72!

    Alert to the moderators, KRO2 is Otacon72 who is a highly abusive poster banned under dozens of accounts!



    Apple smartphones have destroyed Samsung's not even a competitions since the S2.

    As a business Apple is a lot better than Samsung, both in profit since the S2 release.

    If you compare high end products to high end products Apple has more marketshare than Samsung. Samsung has more total marketshare because it makes a gizzillion crappy plastic phones for the developing world to buy for cheap.

    Too bad marketshare != dominance. Just ask GM, Chrysler and Ford that had more marketshare than BMW how well did those companies do from 2006-now...


    Having had both an iphone and a Note 3 I can tell you that in terms of the guts and performance in real life and in benchmarks it is very close. Premium phones have reached a point that they are no longer hampered by weak guts. I would take my note 3 every day of the week over the iphone because of:

    1. The glorious screen size of the Note 3 which makes carrying around an ipad no longer necessary. I pity poor iphone users stuck with antiquated screen sizes, until of course the next iphone, since Apple has at long last seen the light and will make a larger phone, at which point iphone users will find some kind of fig leaf in saying that the way Apple makes a large phone is better after screaming for years that that tiny little screen was 'the perfect size'. LMAO at that.

    2. The Google integration and the Google search widget and voice search which makes doing actual business on the phone vastly better than on an iphone.

    3. The fact you can carry extra batteries (without having to put some sort of lame excuse for a combo battery/case on it..)

    4. The huge storage capacity - sorry but being stuck with 64 gig is lame and to get that you have to pay a HUGE premium. I have 96 on my Note thanks to being able to put in a cheap SD card.

    5. The fact that the Google cloud is amazing compared to Apple's lame excuse.

    6. I will say that Apple phones have a certain quality look and feel, brittle as all hell if you drop one, and so easy to scratch that NOBODY actually uses a naked iphone and instead of seeing and feeling that quality construction you must feel and see a cheap case - no phone looks so cheap as an iphone because the iphone in a case looks cheap. As always Apple sacrificing practicality for some sort of ideal notion of design perfection.
  • -1 Hide
    wemakeourfuture , May 29, 2014 12:56 PM
    Quote:
    Quote:
    Quote:
    Quote:
    Quote:
    This acquisition makes sense....... Both are products which have nothing but marketing power and brand recognition power on them. They are a good fit actually.....


    Apple has 18% of the mobile market share... the laymen (or fandboy) will say that's tiny. Apple pulls 18% with a dozen products... Android/Google/Samsung pulls 80% with 1,000+ different devices. Apple must be doing something right.


    1) there are not 1000s and BTW, that is called choice! Something you know nothing about.
    2) Samsung alone beats Apple's market share which is around 15%. Once again Samsung offers choice and Apple does not.

    Samsung has been b slapping Apple since the Galaxy S2. Dream on Otacon72!

    Alert to the moderators, KRO2 is Otacon72 who is a highly abusive poster banned under dozens of accounts!



    Apple smartphones have destroyed Samsung's not even a competitions since the S2.

    As a business Apple is a lot better than Samsung, both in profit since the S2 release.

    If you compare high end products to high end products Apple has more marketshare than Samsung. Samsung has more total marketshare because it makes a gizzillion crappy plastic phones for the developing world to buy for cheap.

    Too bad marketshare != dominance. Just ask GM, Chrysler and Ford that had more marketshare than BMW how well did those companies do from 2006-now...


    Having had both an iphone and a Note 3 I can tell you that in terms of the guts and performance in real life and in benchmarks it is very close. Premium phones have reached a point that they are no longer hampered by weak guts. I would take my note 3 every day of the week over the iphone because of:

    1. The glorious screen size of the Note 3 which makes carrying around an ipad no longer necessary. I pity poor iphone users stuck with antiquated screen sizes, until of course the next iphone, since Apple has at long last seen the light and will make a larger phone, at which point iphone users will find some kind of fig leaf in saying that the way Apple makes a large phone is better after screaming for years that that tiny little screen was 'the perfect size'. LMAO at that.

    2. The Google integration and the Google search widget and voice search which makes doing actual business on the phone vastly better than on an iphone.

    3. The fact you can carry extra batteries (without having to put some sort of lame excuse for a combo battery/case on it..)

    4. The huge storage capacity - sorry but being stuck with 64 gig is lame and to get that you have to pay a HUGE premium. I have 96 on my Note thanks to being able to put in a cheap SD card.

    5. The fact that the Google cloud is amazing compared to Apple's lame excuse.

    6. I will say that Apple phones have a certain quality look and feel, brittle as all hell if you drop one, and so easy to scratch that NOBODY actually uses a naked iphone and instead of seeing and feeling that quality construction you must feel and see a cheap case - no phone looks so cheap as an iphone because the iphone in a case looks cheap. As always Apple sacrificing practicality for some sort of ideal notion of design perfection.


    Reasons why my brother-in-law dislikes his Note II versus an iPhone

    1. OS updates take half a year to a year to be ready on his phone, iPhone its 0 day

    2. Malware, he's obtained insecure apps over Google Play, such apps are astronomically more prevalent on Google Play versus Apple App Store

    3. He has a problem with his phone and its out of warranty. He phones Samsung they basically tell him to F' off and won't do anything. He had an iPhone many years ago even out of warranty the Apple Store helps and accommodates customers.

    4. Apps, he sees me using new apps and gets frustrated why its takes so long for an app to be available on Google Play. Also doesn't like the lack of quality apps on Google Play and delay in updates. He bought an iPad to address this now.

    5.Crappy build quality. Materials and build quality are sub-par from an iPhone, he never uses a case so the whole concept he'd put a case on his iPhone doesn't apply.

    Suffice to say he's skipping the Note 3 and getting an iPhone 6.
  • 3 Hide
    WyomingKnott , May 29, 2014 1:33 PM
    Cool. Second-rate sound reproduction to go with third-rate sound sources. But they look really cool.
  • -1 Hide
    ericburnby , May 29, 2014 1:34 PM
    Samsung announced a few months ago that they sold their 200 millionth Galaxy S phone. Over the exact same time period since the original Galaxy S, Apple has sold 413 million phones. It's not even close - Apple sells 2x as many flagship phones as Samsung does.

    Since the Galaxy S Samsung has sold some 1.5 billion phones. 200 million Galaxy S, and 1.3 billion "others". When people say Samsung sells a lot of low-end phones, they're not kidding. It's over a billion so far.
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