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Apple Seals Beats Deal, Lays Off 200

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+.

  • Derza10
    2.6 billion + 400,000 != 3 billion.. Unless of course you meant another 400 million in stocks?
    Reply
  • scolaner
    Yep, good catch on the typo, thanks--
    Reply
  • pills161
    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.
    Reply
  • shafe88
    So does this mean no more beats audio for HP.
    Reply
  • southernshark
    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.
    Reply
  • Ragnar-Kon
    Never understood the Beats fad. Nor do I understand how Beats fits into Apple's grand scheme.

    Guess we'll find out shortly.
    Reply
  • cmi86
    Sweet over priced gimmick marketing audio to go with over priced gimmick marketing phone/computers/tabs. Mass produced for the sheeple of the world.
    Reply
  • xpeh
    Welcome to the placebo
    Reply
  • Alpha3031
    Another reason not to buy beats :P. Or apple.
    Reply
  • robochump
    Apple has allowed the 200 employees affected by acquisition to find other positions so this article is out dated.
    Reply