Apple to announce Beats deal this week at a lower price

Apple to announce Beats deal this week at a lower price
According to those familiar with Apple's plans, the company is going to finally announce the purchase of Beats Audio this week. However, the price has been knocked down to $3 billion from the original $3.2 billion that Apple was expected to pay, when the rumor first broke earlier this month. It would still be the largest transaction in Apple's history.

According to a report published on Tuesday, Apple wanted to cut the price of the deal once it learned that Beats Music, the streaming music site coveted by Apple, had only 111,000 paid subscribers in March. Apple wants to use Beats Music to improve the reception that iTunes Radio has received. In comparison to the tepid roll call that Beats Music has, rival Spotify has 10 million paying subscribers, and 30 million who listen for free.

While Beats Music wouldn't seem to carry such a high valuation, Apple does believe that the Beats Audio headphones division is worth a King's ransom. This is the part of the company that produces and sells high end headphones, priced as high as $450. That division brought in revenue of $1.3 billion last year.

One person close to the talks said that Apple had not even conducted its due-diligence when the initial rumor broke. A report last week from music publication Billboard stated that Apple was miffed at Beats co-founder Dr. Dre, who recorded a video selfie when the deal was first rumored nearly three weeks ago. Allegedly drunk, Dr. Dre bragged in the video that he was now the first hip-hop billionaire. According to figures from Forbes, Dre stood to make $800 million from a sale of Beats Audio at $3.2 billion. At $3 billion, he might have to recant his statement. At the latter price, Dr. Dre would gross about $750 million from the sale. After paying Uncle Sam, the good Doctor would probably fall short of his $1 billion goal.

source: NYPost via AppleInsider

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33 Comments

1. PermanentHiatus

Posts: 267; Member since: Jun 22, 2012

I was hoping it wouldn't happen. Apple would make the Beats brand look bad.

3. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

You mean something like this? Because I'm bad, I'm bad come on You know I'm bad, I'm bad come on, you know You know I'm bad, I'm bad come on, you know And the whole world has to Answer right now Just to tell you once again Who's bad

4. regkilla

Posts: 87; Member since: Sep 13, 2012

Fandroid, Apple actually gonna make the Beats brand better.

6. ihavenoname

Posts: 1693; Member since: Aug 18, 2013

I think he is a Beats fan and Apple hater. He doesn't want to Apple to buy company he loves. And brand wise, Beats is pretty peasant brand compared to Apple, which is pretty much the most powerful brand in the world. http://www.interbrand.com/en/best-global-brands/2013/Apple

17. engineer-1701d unregistered

Hahahahahahahahahahahahahahahahaha yeah sure what ever you apple trees need to sleep at night, go ahead and create your dream world

11. Rager722

Posts: 596; Member since: Jan 30, 2013

Beats already sucks man

12. RoundhouseMcGee

Posts: 188; Member since: May 25, 2014

While apple would undoubtedly bring a whole new level of fail to Beats, I think they've done a good job making themselves look bad. Average audio quality, poor construction, overpriced, and a drunken braggart who beats women for an exec is a pretty good start to looking bad. Except with apple you would still get all that, but a $300 set of headphones just became a $600 set of headph- excuse me, iHeadphones.

22. InspectorGadget80 unregistered

What Does apple knows bout lower price. They over charge everything

26. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

Millions of joes buy their overpriced products just to look cool and has a Apple logo stamped on it. Surely Apple is laughing their butts out saying what a bunch of dumb people we are

32. networkdood

Posts: 6330; Member since: Mar 31, 2010

Yes it is...

2. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Makes me wonder if WWDC is not going to be about the "connected home" as people think of it today, but more along the lines of "connected home for audio/video", something along the lines of Sonos.

5. techloverNYC

Posts: 601; Member since: Nov 20, 2012

Dre's drunken ass got him $.2 billion less lol

8. networkdood

Posts: 6330; Member since: Mar 31, 2010

200 million, approx....for shame

7. GreekGeek

Posts: 1276; Member since: Mar 22, 2014

Massive props to these two guys for cleverly marketing an utterly worthless pos tech. Swear to god I have a $100 Sennheiser HD448 that sounds soo much better than their $300 cans. Pure genius. It would be hard to top their achievement

9. networkdood

Posts: 6330; Member since: Mar 31, 2010

Apple and Beats are all about the Brand, so this 'marriage' makes sense - meanwhile, there are better products out there in their respective industries, and life goes on....

10. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Apple acquiring Beats is an important step in Apple becoming a caricature of themselves. "exaggeration by means of often ludicrous distortion of parts or characteristics"

14. Mrmark

Posts: 352; Member since: Jan 26, 2013

You stole my reply! But exactly the point ! People have been building better cars from backyard scratch! But the Porsche is all about brand !

15. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

Apple and Beats are marketing driven "brand" companies, but there are very few people or companies that build better cars than Porsche. Just sayin.

18. engineer-1701d unregistered

The problem is there is always going to be the idiot's that know nothing and will talk them up on tv and other people that know nothing about technology will fall for it. Just like the apple fans that can't look past the ups. I had a coworker that for 4 years did nothing but say iPhone is all he needs then after trying note 3 was in love saying i cant believe I did not listen to you before. Know he has 2 notes work and play

23. mrblah

Posts: 577; Member since: Jan 22, 2013

It is more of a red headed adoption than a marriage.

24. InspectorGadget80 unregistered

That's going to be my next head phones. Do u know if they make bluetooth?

13. liftmeup unregistered

Dre can now invest more time in finishing DETOX

16. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

And when he beats up more women, they can sue him for more money.

19. darkkjedii

Posts: 30670; Member since: Feb 05, 2011

You sound jealous dude.

20. AfterShock

Posts: 4146; Member since: Nov 02, 2012

Jealous of beating women? Where does he imply that? You were all hot for an obviously underaged girl a day or two ago weren't you, all Jedi approved and all.

28. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

Attacking underaged girls. Wow feeling hot for a young girl whose not 18 yet.

30. greathero1

Posts: 584; Member since: Jun 13, 2008

Hopefully he is talking about how some people bring up old events to tear a person down even though the person has changed their ways. The incidents with Barnes and Michele happened over 20 years ago. Maybe the guy has seen the error in his old ways and have changed. Has there been any recent incidents of spousal abuse? Has there been any incidents of breaking the law in general? The guy took a cheap shot because he didn't have anything else to go on. It's sad, because when I see Dr Dre, I see somebody who has made it out of hell, lost it all to leave Deathrow, then regain it all and then some. If 0xFFFF wants to talk about something, talk about what the man is doing now in his life. Like the $70 million he and Lovine gave to Univ of So Cal.

33. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

@greathero1: IMO, you are trivializing a serious aspect of a person's character that should not be trivialized. http://pando.com/2014/05/23/beaten-by-dre-apple-plans-to-acquihire-a-man-who-violently-assaulted-a-woman-and-the-tech-industry-doesnt-care/ Personally, I don't believe in the "money is everything" philosophy. Some people are like this and generally speaking the world is worse because of it.

31. EclipseGSX

Posts: 1770; Member since: Oct 18, 2011

ahahahah getting sick of your middle aged, average looking "wife" dark?? LOL JOKE

27. Arte-8800

Posts: 4562; Member since: Mar 13, 2014

"Jealous" of what? More like concerned and worried that this patent troll company is monopolising and bullying and trying to close other Oems from progressing. I forgot it's your beloved iFruit company.

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