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Apple buys Beats Audio for $3 billion

Posted: , by Alan F.

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Apple buys Beats Audio for $3 billion
It's now official. Apple has purchased Beats Audio for $3 billion. $400 million of that amount will vest over time. It is the largest purchase ever made by Apple, and represents a small amount of the company's $160 billion cash hoard. Apple CEO Tim Cook said that Beats Audio's co-founders, Jimmy Iovine and Dr. Dre, will be spending more time in Silicon Valley, working for Apple. Cook also said that the Beats brand will remain intact.

The purchase is an admission by Apple that its pay-per-tune payment plan for iTunes is not working. Apple wants to have a service that charges users monthly for access to content, and Beats Music fits the bill. Dr. Dre dialed down the celebration after an initial self-congratulatory video selfie made Apple brass a bit worried about the deal. Today, Dre said, "Financially I'm in a place I never dreamed of. Now I'm just ready to get started with the work."

Many might consider the price high considering Beats Music had just 111,000 paying subscribers in March. But the headphones division raked in over $1 billion in revenue, and that might be a cash cow for Apple until the streaming music side of the company starts performing.

"This is a big deal. But to put it in some perspective, we acquired 15 companies last year and 12 this year, some 27 in 18 months. But this one is all about music, which we've always felt is in our veins and we've always appreciated that technology alone was not enough."-Tim Cook, CEO, Apple

source: USAToday

82 Comments
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posted on 28 May 2014, 16:01 12

1. ArtSim98 (Posts: 3535; Member since: 21 Dec 2012)


I didn't like Beats in the first place, so not a big deal to me.

posted on 28 May 2014, 16:12 8

5. 0xFFFF (Posts: 3806; Member since: 16 Apr 2014)


I breathed a sigh of relief as Apple didn't buy Spotify.

posted on 28 May 2014, 16:34 2

16. Droidrapist (Posts: 186; Member since: 28 May 2014)


They have money to buy them too... LOL. Don't hold your breath. Att bought Direct TV anything is possible in 'Merica!

posted on 28 May 2014, 16:47 2

21. 0xFFFF (Posts: 3806; Member since: 16 Apr 2014)


You are right -- Apple has the money and that is what concerns me.

They could still buy Spotify, Sonos, and Sennheiser and have a powerful combination of streaming, whole house audio, and truly high quality headphones (note that Sennheiser does more than just make headphones).

All of these products would suddenly stop working well, or at all, with non-Apple products. And Apple's insane greed would eventually suck the life out of a high quality company like Sennheiser.

posted on 28 May 2014, 18:08

47. Arte-8800 (banned) (Posts: 4562; Member since: 13 Mar 2014)


And Beyer Dynamic headphones

posted on 28 May 2014, 17:58

43. Marienx (Posts: 73; Member since: 27 Aug 2013)


Dude, that would suck... Google should buy it before its too late.

posted on 28 May 2014, 18:43

53. 0xFFFF (Posts: 3806; Member since: 16 Apr 2014)


Actually, the DOJ should dust off the Sherman Antitrust Act and chop Google up into little pieces. And not let them reassemble like ATT/VZW.

posted on 28 May 2014, 18:48 4

56. joey_sfb (Posts: 5981; Member since: 29 Mar 2012)


The same can be say about all three monopoly. Apple, Google and Microsoft.

Let the small guys have a chance.

posted on 28 May 2014, 17:57 1

41. Phonecall01 (unregistered)


Not a big deal for you; So you wouldn't bother read and comment. Oh Wait a minute...!

posted on 28 May 2014, 19:11 2

63. akki20892 (Posts: 3901; Member since: 04 Feb 2013)


U r here since 2009, and not too many comments. I mean how? Lol why u won't feel to comment. Beacause I can't just read comments and not comment too much.

posted on 28 May 2014, 20:29

73. crazzyd77 (Posts: 36; Member since: 07 May 2014)


Same here.

posted on 28 May 2014, 20:52

75. crazzyd77 (Posts: 36; Member since: 07 May 2014)


Same here.

posted on 28 May 2014, 16:06 20

2. Neo_Huang (Posts: 1067; Member since: 06 Dec 2013)


Two overrated and overpriced companies have joined together in a mission to swindle more clueless consumers.

posted on 28 May 2014, 16:08 3

4. Arte-8800 (banned) (Posts: 4562; Member since: 13 Mar 2014)


Good to know Apple is down by 3billion from offshore reserves

posted on 28 May 2014, 16:18 4

9. Sauce (unregistered)


At least they can toss around billions of dollars without it even tickling them lol

You'll know Apple is in a bad position when they start saying "iPhones shipped" instead of sold :)

posted on 28 May 2014, 16:29 4

15. PBXtech (Posts: 1032; Member since: 21 Oct 2013)


The whole "shipped" vs "sold" bit is nonsense. OEMs don't ship phones to people that don't purchase them. It's just doubletalk from a certain side to make it out like they didn't sell those phones.

posted on 28 May 2014, 17:06

25. Sauce (unregistered)


Your comment is nonsense, and so is that argument.

A-Rod swings at 100 perfect pitches. Hits 3 home runs.

BREAKING NEWS: A-ROD HITS 100 HOME RUNS IN ONE GAME!

Oh wait…. was the pitcher supposed to deliver or "ship" 100 home runs to the opposing team that game just because the batter wanted the home runs? Hmmmmm…….

posted on 28 May 2014, 17:51 4

40. PBXtech (Posts: 1032; Member since: 21 Oct 2013)


And of course your baseball comment makes perfect sense? okay

Why not use some obscure automobile analogy while you're at it.

posted on 29 May 2014, 11:49

82. jroc74 (Posts: 6015; Member since: 30 Dec 2010)


I disagree on that. I can ship 100 million phones to retailers, but if they dont get sold.....what was the point?

Is the retailer gonna keep buying phones from you that only the retailer buys?

Using the shipped number will always look better. Ask Nintendo about that with the Wii U...or even MS and Xbox One.....

posted on 28 May 2014, 16:54 1

23. darkkjedii (Posts: 22013; Member since: 05 Feb 2011)


Excellent post bro

posted on 28 May 2014, 17:08 1

26. Sauce (unregistered)


They make me laugh Jedii. As much as I love a variety of OEMs, this whole "shipped" thing is silly. IF Apple used the "ship" gig and gave that to the public each quarter, Apple would decimate the playing ground 100 fold than it already does lol. Read post 15 & 25.

posted on 28 May 2014, 17:32 1

34. darkkjedii (Posts: 22013; Member since: 05 Feb 2011)


Post 25 may be the best post ever lol. Dude you're killing these jealous couch potato fandroids. Go easy on em Sauce, most are like 13 years old, and 250 lbs dude lol.

posted on 28 May 2014, 17:51 1

39. AfterShock (Posts: 3698; Member since: 02 Nov 2012)


You just scream of stranger danger to them now.

posted on 28 May 2014, 18:44 3

54. Arte-8800 (banned) (Posts: 4562; Member since: 13 Mar 2014)


Says the guy who stalks on underaged girls and has a middled age old wife

Lmfao jealous… more like hate and dislike that the patent troll company will tumble and decend in coming years

Jealous my foot of Apple

Says the guy who wants to camp with his wife for couple of nights to buy the ip6, with bunch of young kids

posted on 28 May 2014, 18:56 2

59. darkkjedii (Posts: 22013; Member since: 05 Feb 2011)


Awwww he's mad and butthurt lol. It'll be ok Artepooh.

posted on 28 May 2014, 19:27 2

66. Arte-8800 (banned) (Posts: 4562; Member since: 13 Mar 2014)


Hahaha,,,,, I can't stop laughing cause of you, a big huge tall guy like you camping over night to buy an ip6, wth your wife, wth lmao

posted on 28 May 2014, 19:39

68. darkkjedii (Posts: 22013; Member since: 05 Feb 2011)


Awwww see post 59 LMAOOOOO

posted on 28 May 2014, 17:49 8

38. tedkord (Posts: 12199; Member since: 17 Jun 2009)


Apple does use shipped. They count every phone they ship to Verizon, AT&T, Best Buy, etc...as sold. Because they are sold. Just as Samsung's are sold when Verizon, AT&T, Best Buy, etc... buy them.

posted on 28 May 2014, 17:58 7

44. willard12 (Posts: 1717; Member since: 04 Jul 2012)


Since T mobile, Sprint, Rogers, best buy don't report to Apple what they sell, I'm afraid Apple is in the same boat as everyone else. If they do report "sales," it is simply as an estimate from an analyst.

http://www.ubergizmo.com/2014/01/apple-expected-to-report-record-iphone-and-ipad-shipments-later-today/

posted on 28 May 2014, 17:41 3

35. AfterShock (Posts: 3698; Member since: 02 Nov 2012)


If the carrier is contractually signed to sell them or loose money on inventory that can't be returned, what exactly is the difference that would decimate market?

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