Saturday, May 10, 2014

Apple in Talks to Acquire Beats Electronics

Apple, it has been reported is in talks to acquire Beats Electronics, the high end headphone company and streaming music created by Dr, Dre and Jimmy Iovine, a deal which is worth $3.2 billion and according to Financial Times, the deal is likely to be announced if the negotiations works our well in the next week.

It is reported that Apple would be paying the deal amount for the company, a sum which dwarfs the $404 million that Apple spent to acquire NeXT in the year 1996 and is one of the largest purchase as of date. As per its last earnings call, Apple had around $150 billion in cash on hand with plenty for coverage on large acquisition.

Beats Streaming Service

Besides, its line of bass boasting ear pieces, Beats has been in the competitive market for subscription streaming services with mobile offering, which unlike apple’s iTunes and iTunes Radio, offers ad-free on demand music listening for around $10 per month and if the deal goes through, Apple will be acquiring the subscription business together with Beat’s hardware division accompanied with Beats management team that will be reporting to Apple CEO, Tim Cook, as reported by Financial Times.

Beats at the moment has refrained from commenting on this and CNET though had contacted Apple will get back on hearing from them. Since Apple had long favourable relationship with Beats, their branded headphones lines are featured in both its physical Apple stores as well as the accessory section of its online store where the crux of the deal may turn out to be Beats Music.

Beat’s streaming service may become a central part of Apple’s music strategy after the launch of its online radio service of iTunes Radio last year. Moreover, Beats Music debuted with billing and marketing partnership with AT&T and as per reports has been swiftly growing.

Launch of Beats Music Service

Besides producing a range of popular premium headphones and speakers which Apple has currently been selling in its stores, Beats has also launched its Beats Music service which is a direct competitors to Spotify, Pandora as well as Apple’s own iTunes Radio service and is a subscription based on demand service which would be bolstering Apple’s free station based iTunes Radio service.

Beats Electronics purchase comes as Apple has been rumoured to be working on a complete revamp of iTunes, to boost the declining sales in music. Part of this revamping would include an on demand streaming music service similar to Spotify though the company may intend to purchase Beats instead of designing its own service from the ground level. Subscription for Beats Music is available for $9.99 per month is focused on curation.

Moreover the company had also hired experts in music from popular radio station across the country to create stations and playlist from the service’s twenty million song catalogue and it is yet not clear if Apple would be keeping the Beats Music format intact if it intends acquiring the company though the curation would be fitting well with the iTunes music stores that would be offering music choice which would be picked by Apple editors. Do get back to Macmyth to get some insight on the latest information on Apple Technology.

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