Date
14 December 2017
Beats gives Apple an important foothold in the streaming music market with the landmark deal, expected to close in September. Photo: Bloomberg
Beats gives Apple an important foothold in the streaming music market with the landmark deal, expected to close in September. Photo: Bloomberg

Apple buys Beats for US$3 bln in landmark deal

Apple has agreed to buy Beats Electronics, the United States-based maker of eponymous headphones and speakers, for US$3 billion in its biggest acquisition ever.

The world’s largest technology company will pay US$2.6 billion in cash and US$400 million in Apple stock which will vest over time.

The deal is expected close in September, pending regulatory approval, the Financial Times reported Wednesday.

Beats was founded by hip-hop artist Dr. Dre and music producer Jimmy Iovine in 2008 and quickly became an iconic brand among young music fans.

It makes most of its money from its speakers and premium-priced headphones which generated U$1.1 billion in 2013.

The deal stunned industry watchers when it was first reported by the Financial Times earlier this month because it broke with Apple’s longstanding practice of developing its own technology.

But Apple chief executive Tim Cook said the acquisition is all about music in a nod to the company’s historic turnaroud when it introduced the iPod in 2001 and revolutionized the music industry.

Beats gives Apple an important foothold in the music streaming market.

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