Sign in with
Sign up | Sign in

Apple Seals Beats Deal, Lays Off 200

By - Source: Apple | B 11 comments

The blockbuster deal that saw Apple cough up $3 billion for headphone maker Beats is done. Apple posted a special page on its website welcoming the Beats team to the Apple fold.

"Today we are excited to officially welcome Beats Music and Beats Electronics to the Apple family," reads the page. "Music has always held a special place in our hearts, and we're thrilled to join forces with a group of people who love it as much as we do." Apple also said that it was "delighted" to be working with Beats co-founders Jimmy Iovine and Dr. Dre.

However, what may be delighting Apple more than its $199.95 headphones is Beats' homebrewed streaming music service, Beats Music. Although it's already rolled out on iOS, Android, Windows, and the web, the service has a long way to go before it can begin to seriously challenge the likes of Spotify and Pandora. Reuters reported earlier this year that the service pulled in 250,000 subscribers in its first two months. 


However, merging it with Apple's iTunes program will make that process much more feasible. The Beats Music team will be reporting to Eddy Cue, Apple's Senior VP of Internet Software and Services.

As it often happens with mergers, though, there are casualties. As Apple welcomes about 500 Beats employees, it's handing pink slips to 200 of them, according to 9to5Mac.

Apple either sees something special in Beats' hardware and the potential for Beats Music ($9.99 per month or $99 per year) to significantly augment its music offerings, or it's getting desperate to compete better in the emerging streaming market--the deal was for $2.6 billion in cash and another $400 million in stocks, which is no pittance even for a juggernaut like Apple.

Follow Seth Colaner@SethColaner. Follow us @tomshardware, on Facebook and on Google+.

Discuss
Add your comment Display all 11 comments.
Top Comments
  • 21 Hide
    pills161 , August 1, 2014 11:17 AM
    An overpriced headset to go with an overpriced phone, no thanks. I see handfulls of douchewads at the gym all the time wearing the Beats headphones and all I can think is that they are gullible chumps.
Other Comments
  • 0 Hide
    Derza10 , August 1, 2014 10:17 AM
    2.6 billion + 400,000 != 3 billion.. Unless of course you meant another 400 million in stocks?
  • 0 Hide
    scolaner , August 1, 2014 10:23 AM
    Yep, good catch on the typo, thanks--
  • 21 Hide
    pills161 , August 1, 2014 11:17 AM
    An overpriced headset to go with an overpriced phone, no thanks. I see handfulls of douchewads at the gym all the time wearing the Beats headphones and all I can think is that they are gullible chumps.
  • 0 Hide
    shafe88 , August 1, 2014 2:02 PM
    So does this mean no more beats audio for HP.
  • 0 Hide
    southernshark , August 1, 2014 3:49 PM
    Quote:
    An overpriced headset to go with an overpriced phone, no thanks. I see handfulls of douchewads at the gym all the time wearing the Beats headphones and all I can think is that they are gullible chumps.
    They may be wearing illegal copies from China bought for a fraction of the price. I bought a pair when I was over there.
  • 7 Hide
    Ragnar-Kon , August 1, 2014 5:36 PM
    Never understood the Beats fad. Nor do I understand how Beats fits into Apple's grand scheme.

    Guess we'll find out shortly.
  • 2 Hide
    cmi86 , August 2, 2014 9:03 AM
    Sweet over priced gimmick marketing audio to go with over priced gimmick marketing phone/computers/tabs. Mass produced for the sheeple of the world.
  • 3 Hide
    xpeh , August 2, 2014 3:05 PM
    Welcome to the placebo
  • 0 Hide
    Alpha3031 , August 3, 2014 9:09 PM
    Another reason not to buy beats :p . Or apple.
  • 0 Hide
    robochump , August 4, 2014 3:44 PM
    Apple has allowed the 200 employees affected by acquisition to find other positions so this article is out dated.
  • 0 Hide
    WRXSTIGuy , August 5, 2014 8:09 AM
    Ahhhh Branding... People will pay $300 for a pair of headphones that sound worse than a $70 pair just to look cool.
React To This Article