Apple is reportedly gearing up to buy Beats Electronics, the headphone manufacturer co-founded by Dr. Dre and music producer Jimmy Iovine that has also spun off a streaming-music service.
The deal could cost $3.2 billion, according to The Financial Times, and would give Apple full control of the brand that’s made gigantic flashy headphones the trendiest thing to hit kids’ heads since backward baseball caps.
Does this mean Dr. Dre is about to become the newest Apple employee?
Tim Cook recently said Apple’s not afraid to do a 10-figure acquisition for the right company, but at $3.2 billion, Beats would not only be the largest Apple acquisition ever, it’d cost more than all previous acquisitions combined.
Beats has become a musical juggernaut since launching in 2008 with a line of premium headphones endorsed by Dr. Dre. The company followed up with a number of other celeb-endorsed personal audio accessories and headphones before launching its well-reviewed music-streaming service in January 2014.
Apple’s acquisition of Beats would bring some conflicts of interest because the audio giant has deals to put audio gear in HP laptops and HTC smartphones.
Talk of the possible Beats acquisition has befuddled the Internet, with tech fans questioning what the fashion headphone maker could bring to Apple’s elite brand.
Apple's acquisition strategy is BAFFLING
— J(enna) Wortham (@jennydeluxe) May 8, 2014
Was about to make fun of Beats being crappy, overpriced audio gear and then I remembered the iPod Hi-Fi.
— Dan Frommer (@fromedome) May 8, 2014
Some see Beats’ high-priced headphones fitting in perfectly with Apple’s business model. And with a flashy streaming-music app in tow, maybe Beats could provide the injection of fun and youthfulness Apple needs to revitalize its Music app and audio accessories.
Beats is a dead-on acquisition for Apple. High-margin, high-brand, pop culture electronics. Should've been theirs in the first place.
— Anil (@anildash) May 8, 2014
To sum up: Apple + Beats = high-margin hardware, music (which they love), style, cool factor, AND a premium music subscription service.
— Molly Wood (@mollywood) May 8, 2014
Apple’s first head of design, Bob Brunner, could be coming back to the company as part of the acquisition as well. If the purchase pans out, it would be eight times larger than Apple’s $400 million acquisition of NeXT Software, which brought Steve Jobs back into the fold in 1996.