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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: 3004; 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: 3346; 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: 3346; 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: 20; 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: 3346; 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: 3006; 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 (Posts: 138; Member since: 02 Apr 2009)


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: 3566; 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: 35; Member since: 07 May 2014)


Same here.

posted on 28 May 2014, 20:52

75. crazzyd77 (Posts: 35; Member since: 07 May 2014)


Same here.

posted on 28 May 2014, 16:06 19

2. Neo_Huang (Posts: 463; 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: 980; 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: 980; 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: 5009; 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: 11995; 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: 11995; 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: 2812; 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: 11995; 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: 11995; Member since: 05 Feb 2011)


Awwww see post 59 LMAOOOOO

posted on 28 May 2014, 17:49 8

38. tedkord (Posts: 4971; 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: 827; 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: 2812; 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?

posted on 28 May 2014, 17:41

36. AfterShock (Posts: 2812; Member since: 02 Nov 2012)


Lose*

posted on 28 May 2014, 19:13 1

64. iushnt (Posts: 681; Member since: 06 Feb 2013)


haha no, shipped and sold wont make that difference. i also find it non-sense Sauce..anyways i know u like Apple and would say anything that would favor them :)

posted on 28 May 2014, 16:06 5

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


P0$ brand buying another p0$ company

posted on 28 May 2014, 16:15 5

7. 0xFFFF (Posts: 3346; Member since: 16 Apr 2014)


Apple's pyrrhic victory. Hopefully Apple will assimilate Beats and the world will end up with one less POS company.

"A Pyrrhic victory is a victory with such a devastating cost that it is tantamount to defeat. Someone who wins a Pyrrhic victory has been victorious in some way; however, the heavy toll negates any sense of achievement or profit"

posted on 28 May 2014, 16:45 1

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


Please my mac has been solid for 7 years can't remember the last pc I owned before that lasted that long... I've never had to 'erase everything on it' because of a virus and all the upgrades have only made it work better and better. I bought it used on ebay on top of that for $900 (a $1400) computer so I didn't even overpay for it.

posted on 28 May 2014, 18:07

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


Who and why the h€ll would any hacker target OSX platform. They are not intrestead on that p0$.

posted on 28 May 2014, 20:03

69. Furbal (Posts: 337; Member since: 22 Sep 2012)


Yeah, but you cant maximize or snap a window to a side of the screen.

posted on 28 May 2014, 16:13 1

6. QuadFace (Posts: 62; Member since: 19 Aug 2013)


I believe Apple will put more quality to Beats heatphones.

posted on 28 May 2014, 16:16 6

8. Neo_Huang (Posts: 463; Member since: 06 Dec 2013)


More "quality" because they will be much more expensive.

posted on 28 May 2014, 16:19 1

12. Sauce (unregistered)


Someone get this guy a herding shepherd dog.

posted on 28 May 2014, 17:58 1

42. darkkjedii (Posts: 11995; Member since: 05 Feb 2011)


Sauce apples gonna buy google next lmao.

posted on 28 May 2014, 18:08 5

46. AfterShock (Posts: 2812; Member since: 02 Nov 2012)


Net value of Google is higher then Apple Irc.
Apple may have more coin, but they could never swing it even in your world.

posted on 28 May 2014, 18:41

51. darkkjedii (Posts: 11995; Member since: 05 Feb 2011)


Lmao dude you're hella pissed aren't you? You're hooping all this article defending LMAO, dude go take a nap

posted on 28 May 2014, 18:28 1

50. Sauce (unregistered)


Looool. Fandroids. Fandroids everywhere!

posted on 28 May 2014, 18:41

52. darkkjedii (Posts: 11995; Member since: 05 Feb 2011)


Aftershock is pissed man.

posted on 28 May 2014, 18:51 3

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


Darkkjedii is delusional man.

posted on 28 May 2014, 19:09 1

60. Sauce (unregistered)


Only one jealous frustrated and angry is you. You follow me and Dark around like a lost puppy. Get over yourself LOLOLOLOLOLOL

posted on 28 May 2014, 20:07

70. darkkjedii (Posts: 11995; Member since: 05 Feb 2011)


Hammer just hit the nail on the head. He doesn't realize how easy he is to bait. I love to poke and prod him, so he can say "so says the guy who want to camp out with his middle age wife". He falls for it every time, like you said following us like a lost puppy. The dummy actually fails to see that I'm baiting him, due to his stupidity. Watch this, hey Arte what am I gonna do to get the ip6 on launch day?

posted on 28 May 2014, 18:48 1

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


Jealous anger frustration paranoid everywhere

posted on 28 May 2014, 19:18

65. iushnt (Posts: 681; Member since: 06 Feb 2013)


Or may be Apple buy Samsung!! Total fixed assets for Samsung = $590 billion
Market Capitalization = $265 billion)(25%)..the remaining is owned by Lee family

posted on 28 May 2014, 16:18 2

10. 0xFFFF (Posts: 3346; Member since: 16 Apr 2014)


A lot of the $3B Apple spent on Beats was due to the company's high gross margins. For example, selling $14 headphones for $299. Maybe Apple will put in more quality, but I would not be surprised to see that $299 become $399 (or more).

posted on 28 May 2014, 16:40 1

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


That makes lots of sense I wouldn't be surprised if they cost $6 to make honestly lol plus Apple sells them at the Apple store so they know exactly how quickly they are selling vs. other headphones and can just go ahead and take that revenue from other stores.

posted on 28 May 2014, 16:50 1

22. 0xFFFF (Posts: 3346; Member since: 16 Apr 2014)


There was a news article that delved into how Beats has their headphones manufactured in China and they figured out it costs $14 to make a $299 pair of Beats headphones.

posted on 28 May 2014, 18:11 2

48. andro. (Posts: 1962; Member since: 16 Sep 2011)


It probably makes sense in Apples minds to buy beats. Apples products have always been about brand name and sell predominately because of brand instead of selling for quality or new innovation. Beats certainly isn't the best by any means when it comes to music quality but the brand name sells. How many times have you seen kids and teenagers about wearing as big and as flashy beat headsets as they can find,Beats are all about teenagers looking cool to their peers,which coincidentally is the exact same perception with apple iphones and we are talking about the exact same age demographic that is Apples biggest buyer market.

posted on 28 May 2014, 20:09 1

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


Apple sells cause of "popularity" not buy technology.

posted on 28 May 2014, 20:21

72. darkkjedii (Posts: 11995; Member since: 05 Feb 2011)


You mean, not by technology...dummy. "Not buy technology", what a tard.

posted on 28 May 2014, 21:47 2

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


Keyboard error….

"Underage stalker"

posted on 28 May 2014, 16:19 3

11. palmguy (Posts: 286; Member since: 22 Mar 2011)


Starting price for base headphones: $700. :)

posted on 28 May 2014, 19:10

61. InspectorGadget80 (Posts: 6588; Member since: 26 Mar 2011)


OUCH!!

posted on 28 May 2014, 20:52

76. crazzyd77 (Posts: 35; Member since: 07 May 2014)


Whoa!

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