updated 05:02 pm EDT, Wed May 28, 2014
Beats co-founders to take unannounced Apple jobs
Following weeks of rumors, Apple has confirmed plans to buy Beats Electronics in a deal worth $3 billion. That figure includes an upfront payout of $2.6 billion, and a remaining $400 million that will vest over time. The purchase includes Beats' hardware and streaming music divisions, and co-founders Jimmy Iovine and Dr. Dre (Andre Young) will join Apple in unspecified job roles.
In explaining the motivation for the deal, Apple CEO Tim Cook states only that he and the company "have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world." A prepared statement from Iovine claims that he has "always known in my heart that Beats belonged with Apple," and that "the idea when we started the company was inspired by Apple's unmatched ability to marry culture and technology."
Cook's statements may support the notion that Apple is interested in Beats Music. Although the service has faired relatively poorly so far, Apple may want to transform its own iTunes Radio into a full-fledged streaming subscription service, given that sales of iTunes music downloads are continuing to shrink. It will also presumably absorb Beats' headphone and speaker products, since they continue to sell well, and could serve as the basis for improved audio in Macs, iPhones, iPads, and iPods.