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Apple reportedly nearing $3.2B acquisition of Beats Electronics

post #1 of 254
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In a somewhat surprising move, Apple is rumored to be in talks with Jimmy Iovine and Dr. Dre's Beats Electronics that could see the audio accessories and music streaming service acquired for $3.2 billion.

Jimmy Iovine
Beats Audio CEO Jimmy Iovine. | Source: All Things D


Citing sources close to the deal, The Financial Times on Thursday reported that an Apple-Beats tie up could happen as early as next week. The publication cautioned, however, that final details have yet to be hammered out and talks may ultimately dissolve.

News of the rumored talks have been corroborated by Bloomberg, The Wall Street Journal and The New York Times, among others.

Under the supposed deal, Apple would gain control of Beats' audio hardware division as well as the firm's subscription-based music streaming service. The Beats management team would report to Apple CEO Tim Cook.

Apple and Beats are not known to have a strong relationship aside from showcasing the company's Beats by Dre headphones and speakers in the Apple Store. However, late Apple cofounder Steve Jobs personally worked with Iovine in when the music executive headed up record label Interscope Geffen.

In an interview last year, Iovine claimed he pushed Jobs toward a subscription music service in the early 2000s.

"So I met [Jobs] and we hit it off right away. We were really close," Iovine said. "We did some great marketing stuff together: 50 Cent, Bono, Jagger, stuff for the iPod -- we did a lot of stuff together. But I was always trying to push Steve into subscription. And he wasn't keen on it right away."

Apple ultimately rolled out iTunes Radio, while Beats launched the subscription-based Beats Music streaming service. Most recently, the company decided to enablein-app subscription purchasing as a way to drum up sales.

With a rumored $3.2 billion acquisition, Apple would be paying above accepted company valuation. Beats recently netted a $500 million investment from Carlyle that valued the company at $1 billion.

During Apple's recent quarterly earnings conference call in April, Cook revealed the company made 24 acquisitions over the past 18 months. Considering the company has never spent more than$1 billion for a company, the rumored $3.2 billion purchase of Beats would be unprecedented.

However, Cook said during the earnings call that Apple was "on the prowl" for potential acquisitions that would further enhance its existing and future product lineups.

"We don't have a rule that says we can't spend a lot or whatever," Cook said. "We'll spend what we think is a fair price."
post #2 of 254

OOOOooooooooo... really?  I am shocked!

Brand killing?  Or... will be part of iTunes?    

post #3 of 254
That would be strange. Better spend these money on Wolfram Alpha and Imagination Tech. 
post #4 of 254
Quote:
Originally Posted by jason98 View Post
 

What about... 5x of this  money for Yahoo!  

I still like Yahoo! to be acquired by Apple. Nice dream though.

post #5 of 254
I'm surprised Apple is interested in these unnaturally bass-boosted headphones and speakers. I always liked Apple for producing screens that display natural color, photos that are true-to-life and unequalized sound. Maybe strictly for the streaming service? I'm not familiar with Beats Streaming, is it any different than iTunes Radio or other streaming services?

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post #6 of 254
For what?
post #7 of 254
Originally Posted by AppleInsider View Post
Apple is rumored to be in talks with Jimmy Iovine and Dr. Dre's Beats Electronics that could see the audio accessories and music streaming service acquired for $3.2 billion.

 

Uh… huh.

 

In other news, Beats Electronics’ stock price is up 500 trillion percent. For tonight. And tomorrow morning, when it comes out that this isn’t happening, we’ll have a few new millionaires.


Oh, wait, they’re not public. Makes it even more strange.

Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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Originally Posted by helia

I can break your arm if I apply enough force, but in normal handshaking this won't happen ever.
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post #8 of 254
Beats is too consumerish. I'd rather see an integration or deal with Shure. Quality matters.
post #9 of 254

I hope this isn't true. What a terrible idea.

post #10 of 254
What?! This rumor is clearly false.

Beats offers nothing to Apple, the brand images are nearly polar, and their "technology" is nothing Apple couldn't create in house. Their music streaming service is weak and has little market share.

Buying would be an utter failure, especially at 3.2 B.

For sake...don't these rumors get filtered?
post #11 of 254

Why?

 

Beats make over priced mediocre headphones and a music service few use. $3.2B??? 
 

I can think of several companies I wish Apple would  buy like Broadcom, Netflix, or Nintendo then close their hardware and move all game titles to iOS and OS X. I really hope this rumor is bogus. 

post #12 of 254

This makes no sense.  Anybody who know anything about audio know that Beats are way over priced for what they are.   You can get better quality from Sennheiser for half the price.  As for the streaming service, apple already has iTunes radio.  That would mean apple is paying for a brand name rather than tech or talent.  Just doesn't seem likely.  And Dr. Dre may sell the headphones but he sure doesn't use them in the studio when he's mixing his own music.

  

post #13 of 254
Stupid idea.
post #14 of 254
Idiotic move (if true).

Beats Electronics has nothing of value for the future. They're just a marketing company selling overpriced crap-tier speakers.
post #15 of 254
I just read a review on headphones and they were right at the bottom.

http://time.com/74886/best-headphones/

Hopefully Apple have another reason, but what, do Apple need their streaming business? It surely can't be the bass heavy headphones.
Edited by digitalclips - 5/8/14 at 3:19pm
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post #16 of 254
This would be Apple's largest acquisition EVER. pissin me off with this rumor
post #17 of 254
I, for one, am ready for the iBeat ____ jokes.

post #18 of 254

Awesome, great way to market to mall food court thugs.  

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post #19 of 254

Didn't Beats recently release a Spotify like service? It has gotten some pretty good reviews.

 

However, more importantly, from Apple's perspective, it has a license from the record companies to deliver music on demand, unlike iRadio. And there have been rumors that the record companies do not want to give Apple the license to offer a Spotify like service.

 

Keeping that in mind, this is most likely an acquisition for the licenses to create a Spotify competitor, than anything else.

 

Also, the CEO seems like a smart dude. Might also be a talent acquisition.

post #20 of 254
Quote:
Originally Posted by digitalclips View Post

I just read a review on headphones and they were right at the bottom.

http://time.com/74886/best-headphones/

Hopefully Apple have another reason.

Their Beats Music music service has been well reviewed. Also, as I suggest in my earlier comment, Apple has been rumored to have trouble acquiring licenses to music catalogs from the record companies in order to create a Spotify competitor. This is an indirect way to do just that.

 

Edit: Macrumors seems to think its a play for Beats Music also. That would make a lot more sense to me. Instead of fudging around building a new music service, and spending months negotiating with the music industry in talks which could fall apart at the last second, further delaying the launch of a revamped iTunes, Apple figured it would pay a slight premium to acquire Beats Music, and get the new iTunes going as soon as possible.

post #21 of 254
Quote:
Originally Posted by Dickprinter View Post

I'm surprised Apple is interested in these unnaturally bass-boosted headphones and speakers. I always liked Apple for producing screens that display natural color, photos that are true-to-life and unequalized sound. Maybe strictly for the streaming service? I'm not familiar with Beats Streaming, is it any different than iTunes Radio or other streaming services?

1) I heard a Nick Cannon interview on Howard 100. He did mention the bass was too much in the original Beats by Dre headphones but that it was corrected. He mentioned this because he, too, has his own headphones which have less bass. I guess a more natural R&B sound.

2) I find this purchase strange, too. So could Beat have some HW talent that Apple can't figure out on their own or do they simply want to attract buyers with the branding?


edit: Nick's headphones are by Monster, which is no longer part of the manufacturing for Beats.
Edited by SolipsismX - 5/10/14 at 9:27am

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post #22 of 254
Quote:
Originally Posted by Chandra69 View Post

What about... 5x of this  money for Yahoo!  
I still like Yahoo! to be acquired by Apple. Nice dream though.

I agree Yahoo would add value to Apple.
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post #23 of 254
If they used this solely to attack Spotify with Beats Music, I'd be happy. I use Spotify a lot, but their attitude towards their users and some of their software design is appalling.
post #24 of 254
Quote:
Originally Posted by addicted44 View Post

Their Beats Music music service has been well reviewed. Also, as I suggest in my earlier comment, Apple has been rumored to have trouble acquiring licenses to music catalogs from the record companies in order to create a Spotify competitor. This is an indirect way to do just that.

Edit: Macrumors seems to think its a play for Beats Music also. That would make a lot more sense to me. Instead of fudging around building a new music service, and spending months negotiating with the music industry in talks which could fall apart at the last second, further delaying the launch of a revamped iTunes, Apple figured it would pay a slight premium to acquire Beats Music, and get the new iTunes going as soon as possible.

Ok, so it maybe more about licensing ... interesting. That said would such licenses transfer to Apple?
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post #25 of 254
: the very large majority of hip hop music consumption and Beats headphone purchases is done by skinny dudes that hail from the suburbs.


Quote:
Originally Posted by punkndrublic View Post

Awesome, great way to market to mall food court thugs.  
post #26 of 254
3.2 b is way out of line.
Quote:
Originally Posted by addicted44 View Post

Didn't Beats recently release a Spotify like service? It has gotten some pretty good reviews.

However, more importantly, from Apple's perspective, it has a license from the record companies to deliver music on demand, unlike iRadio. And there have been rumors that the record companies do not want to give Apple the license to offer a Spotify like service.

Keeping that in mind, this is most likely an acquisition for the licenses to create a Spotify competitor, than anything else.

Also, the CEO seems like a smart dude. Might also be a talent acquisition.
post #27 of 254
Beats is a fad... A quickly fading fad...
post #28 of 254
Quote:
Originally Posted by addicted44 View Post

Their Beats Music music service has been well reviewed. Also, as I suggest in my earlier comment, Apple has been rumored to have trouble acquiring licenses to music catalogs from the record companies in order to create a Spotify competitor. This is an indirect way to do just that.

Edit: Macrumors seems to think its a play for Beats Music also. That would make a lot more sense to me. Instead of fudging around building a new music service, and spending months negotiating with the music industry in talks which could fall apart at the last second, further delaying the launch of a revamped iTunes, Apple figured it would pay a slight premium to acquire Beats Music, and get the new iTunes going as soon as possible.
Spotify NEEDS someone with some weight knocking on their door.
Their core streaming service is one of my favorites available. They are simultaneously one of my least favorite companies.
post #29 of 254
Quote:
Originally Posted by digitalclips View Post


I agree Yahoo would add value to Apple.

 

I agree too. 

 

I would also love to see them purchase Square...pick them up damn it! Before Google does. Apple could use the Square technology. 

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post #30 of 254
Quote:
Originally Posted by punkndrublic View Post

Awesome, great way to market to mall food court thugs.  

Ouch!
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post #31 of 254
I'm a big fan of spotify - buy them.

This rumor is probably just click bait for all the usual apple rumor mill sites.
post #32 of 254
This can't possibly be true. Beats is a crap brand.

Proud AAPL stock owner.

 

GOA

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GOA

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post #33 of 254
Not of fan of the Beats hardware either and the music service is too new to have made an impact with consumers, especially considering the stiff competition. With that said, you can't put down how well Iovine has marketed the Beats brand which has definitely resulted in in enough sales for Apple to want to buy them. Still, I agree, not the best marriage, Apple and Beats
post #34 of 254
Quote:
Originally Posted by daveinpublic View Post

I'm a big fan of spotify - buy them.

This rumor is probably just click bait for all the usual apple rumor mill sites.

Is the FT known to spread false rumors? Just asking ....
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post #35 of 254
Quote:
Originally Posted by IYFCalvin View Post

Not of fan of the Beats hardware either and the music service is too new to have made an impact with consumers, especially considering the stiff competition. With that said, you can't put down how well Iovine has marketed the Beats brand which has definitely resulted in in enough sales for Apple to want to buy them. Still, I agree, not the best marriage, Apple and Beats

Jimmy is a talented guy.
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post #36 of 254
I'm at a loss as to why this makes sense, or why it's worth $3B. Senior management is going to report directly to Cook and do what? Or is that just until the subscription service gets moved under Eddy Cue and hardware design under Jony Ive?
post #37 of 254
Quote:
Originally Posted by digitalclips View Post


Ok, so it maybe more about licensing ... interesting. That said would such licenses transfer to Apple?

And I don't imagine the current license is forever, so even if they did transfer now, what happens when they expire and need to be renegotiated?

post #38 of 254
Quote:
Originally Posted by digitalclips View Post

Is the FT known to spread false rumors? Just asking ....

I doubt the FT is immune from the spreading of false rumors by parties which may have an interest in starting a bidding war.

Proud AAPL stock owner.

 

GOA

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GOA

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post #39 of 254
Quote:
Originally Posted by zklausz View Post

This makes no sense.  Anybody who know anything about audio know that Beats are way over priced for what they are.   You can get better quality from Sennheiser for half the price.  As for the streaming service, apple already has iTunes radio.  That would mean apple is paying for a brand name rather than tech or talent.  Just doesn't seem likely.  And Dr. Dre may sell the headphones but he sure doesn't use them in the studio when he's mixing his own music.
  

Ironically, if he did, he'd maybe mix the bass down a bit more on that kind of 'music'!
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post #40 of 254
Quote:
Originally Posted by Chandra69 View Post
 

OOOOooooooooo... really?  I am shocked!

Brand killing?  Or... will be part of iTunes?    

Beats are premium priced.  $99 - $199 for earbuds, $169 - $379 for headphones in the Apple online store.  A good fit with Apple bringing on Angela Ahrendts and entering the fashion accessories business with the coming iWatch.  Then again, it could just be a rumor that goes nowhere.

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