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Apple agrees to buy headphone maker Beats for $3bn | Apple agrees to buy headphone maker Beats for $3bn |
(35 minutes later) | |
Apple has confirmed it will buy headphone maker and music-streaming service provider Beats Electronics. | Apple has confirmed it will buy headphone maker and music-streaming service provider Beats Electronics. |
The deal is worth a total of $3bn (£1.8bn), and is thought to be Apple's biggest acquisition to date. | |
As part of the acquisition, Beats co-founders Jimmy Iovine and Dr Dre will join the technology firm. | |
Apple boss Tim Cook said the deal would allow the firm to "continue to create the most innovative music products and services in the world". | Apple boss Tim Cook said the deal would allow the firm to "continue to create the most innovative music products and services in the world". |
Beats was founded by music producer Jimmy Iovine and the hip-hop star Dr Dre and until recently was best known for its headphones. | Beats was founded by music producer Jimmy Iovine and the hip-hop star Dr Dre and until recently was best known for its headphones. |
It started a subscription-based music streaming service earlier this year. | It started a subscription-based music streaming service earlier this year. |
Apple has its own iTunes store, the world's largest music download service. It launched iTunes Radio last year. | |
But despite having been an early pioneer of digital music, the Californian firm has been facing increased competition from subscription services such as Spotify, Pandora and Rdio. | |
However, Beats' music service only has about 110,000 subscribers, compared with Spotify's 10 million. | |
The deal with Beats marks a departure for Apple, which has a reputation for developing new products in-house, rather than buying up smaller firms - a method preferred by rivals Google. | |
Apple said it would buy Beats for an initial $2.6bn (£1.6bn), and approximately $400m (£239m) "that will vest over time". | |
Commenting on the deal, Beats co-founder Jimmy Iovine said: "I've always known in my heart that Beats belonged with Apple." | Commenting on the deal, Beats co-founder Jimmy Iovine said: "I've always known in my heart that Beats belonged with Apple." |
"The idea when we started the company was inspired by Apple's unmatched ability to marry culture and technology. | "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." | "Apple's deep commitment to music fans, artists, songwriters and the music industry is something special." |
Apple analyst Jim Dalrymple hinted that it may be Mr Iovine's talent that the technology firm is after. | |
Writing on his website The Loop, Mr Dalrymple said: "In my opinion, Jimmy is going to play an important role going forward. | |
"Maybe not that you always see, but he'll be there". |