Report: Apple on verge of buying Beats for $3.2B

May 9 2014, 9:22pm CDT | by

SAN FRANCISCO (AP) — Apple is orchestrating a $3.2 billion acquisition of Beats Electronics, the headphone maker and music streaming distributor founded by hip-hop star Dr. Dre and music industry impresario Jimmy Iovine, according to a published report.

Citing people familiar with the negotiations, The Financial Times says Apple could announce the deal as early as next week. In its report posted online late Thursday, the newspaper warned the talks could still collapse if the two sides cannot agree on some final details.

Both Apple Inc. and Beats Electronics declined to comment to The Associated Press.

The potential acquisition would add Beats Electronics' popular line of headphones and music streaming service to an Apple line-up that already includes digital music players and the iTunes store, the world's top music retailer.

If the deal is completed, it would be by far the largest purchase in Apple Inc.'s 38-year history.

The Cupertino company has traditionally seen little need to buy technology from other companies, reflecting Apple's confidence in its ability to turn its own ideas into revolutionary products such as the Mac computer, the iPod, the iPhone and the iPad.

But Apple hasn't released a breakthrough product since its former CEO and chief visionary, Steve Jobs, died in October 2011. The innovative void has increased the pressure on Jobs' hand-picked successor, Tim Cook, to prove he is capable of sustaining the success and growth that turned Apple into the world's most valuable company and a beloved brand.

Cook has shown a willingness to spend more of Apple's money than Job ever did. Among other things, Cook began paying Apple stockholders a quarterly dividend and has progressively committed more money to buying back the company's shares.

Apple's pursuit of Beats Electronics is the latest indication that the company is having trouble generating growth on its own. Apple already sells Beats Electronics gear in its stores, giving the company insights into how much the trendy headphones and other audio equipment appeal to its customers.

The negotiations also are taking place as the music market increasingly tilts toward streaming and away from the downloads that once drove the success of Apple's digital music store, iTunes.

U.S. revenue from downloads — which iTunes dominates — dropped 1 percent to $2.8 billion in 2013, while streaming music revenue from the likes of Pandora and Spotify soared 39 percent to $1.4 billion, according to the Recording Industry Association of America.

While downloads still command 40 percent of the market, streaming revenue now accounts for 20 percent of total revenue, up from just 3 percent in 2007.

Beats Electronics LLC was founded in Santa Monica, California in 2008 by Dr. Dre and Jimmy Iovine. Its headphones were manufactured by Monster Cable until the two companies parted ways in 2012. The headphones have become a bit of status symbol worn by celebrities as well as audiophiles.

In 2012, Beats bought streaming music service MOG, which it transformed and relaunched as Beats Music earlier this year. The launch was fueled by a landmark partnership with AT&T that allowed up to five family members to pay $15 a month for the service as long as they were AT&T wireless customers. The deal broke the industry mold of charging each person $10 per month.

___

AP Business Writer Ryan Nakashima in Los Angeles contributed to this story.

 
 

Don't miss ...

 

<a href="/latest_stories/all/all/31" rel="author">Associated Press</a>
The Associated Press (AP) is one of the largest and most trusted sources of independent newsgathering, supplying a steady stream of news to its members, international subscribers and commercial customers.

 

blog comments powered by Disqus

Latest stories

Global entrepreneurship summit boost for SMEs
Marrakech, Nov 22 (IANS) Nine agreements were signed between the Moroccan General Confederation of Enterprises (CGEM) and several small and medium enterprises (SMEs) as well as between major Moroccan banks and start-ups at the 5th Global Entrepreneurship Summit (GES 2014) held in Morocco.
 
 
NASA's flying saucer among 'Best of What's New'
Washington, Nov 22 (IANS) NASA's Low-Density Supersonic Decelerator (LDSD), a spacecraft that aims to facilitate the safe landing of future Mars missions, has earned a place in the the Popular Science magazine's "Best Of What's New" list.
 
 
Indian helping to light up Gambia (Diaspora Feature)
Banjul (Gambia), Nov 22 (IANS) Like many Indians who are proving to be philanthropists around Africa, Ram Mohan has set up a social business called Comafrique Intelizon Initiative and has embarked on the replacement of candles in villages in the Gambia with solar lights from India.
 
 
Leopards in human areas not conflict animals: Study
New Delhi, Nov 22 (IANS) Leopards in human areas are not always "stray" or "conflict" animals but residents with strategies to thrive in human dominated areas, says the first GPS-based study of leopards in India.
 
 
 

Latest from the Network

Sharif urges Obama to take up Kashmir issue with India
Islamabad, Nov 22 (IANS) As US President Barack Obama confirmed his India visit for the Republic Day next year, Pakistan Prime Minister Nawaz Sharif urged him to take up the Kashmir issue with India. Obama spoke to...
Read more on Politics Balla
 
Hiding tattoos irks Chris Hemsworth
Los Angeles, Nov 22 (IANS) Actor Chris Hemsworth says he hates having his tattoos covered while shooting for films. In an interview with PEOPLE magazine, the actor also mentioned that it takes hours to cover the...
Read more on Celebrity Balla
 
Bynes has real medical issue: Ribeiro
Los Angeles, Nov 22 (IANS) Actor Alfonso Ribeiro says actress Amanda Bynes, who grabbed headlines recently for her erratic behaviour, acted strangely on the set of the film "Love Wrecked" in 2005. In an interview with...
Read more on Celebrity Balla
 
Walmart 1-Hour Deals also Available Online
The Walmart Black Friday 2014 Ad revealed 9 1-Hour Guarantee Doorbuster deals available in the Walmart Black Friday 2014 Sale. The Walmart Black Friday 2014 sale will start online Thanksgiving morning and lead right...
Read more on Black Friday Countdown
 
Pune FC aim for semi-spot in King's Cup
Thimpu, Nov 22 (IANS) Pune FC will be up against fellow Indian side Assam State Electricity Board (ASEB) in a crucial third round group stage encounter of the King's Cup at the Changlimithang Stadium here Sunday. The...
Read more on Sport Balla
 
We're doing okay: Zak after Robin Williams' death
Los Angeles, Nov 22 (IANS) Late actor-comedian Robin Williams' son Zak says that the family is still coming to terms with life after the actor's death. Zak, 31, opened up about how his family is coping since his...
Read more on Celebrity Balla
 
Indian golfers Shiv, Chiragh tied 13th, 14th at Manila
Manila, Nov 22 (IANS) Indian golfers Shiv Kapur and Chiragh Kumar fired five-under 67 each to finish tied 13th and joint 14th, respectively, after the third round of the $1 million Manila Masters at the par-72 Manila...
Read more on Sport Balla
 
Saarc panel decides to close regional centres
Kathmandu, Nov 22 (IANS) The Saarc Programming Committee, meeting here Saturday for its 49th session ahead of the 18th Saarc Summit, has decided to close down three regional centres and merge four others, bringing down...
Read more on Politics Balla
 
Nepal-India border to be sealed during Modi visit
Kathmandu, Nov 22 (IANS) Some parts of the Nepal-India border will be sealed during Indian Prime Minister Narendra Modi's visit to Lumbini, the birthplace of Lord Buddha, an official said here Saturday. Three...
Read more on Politics Balla
 
Australia rest pace trio ahead of India series
Melbourne, Nov 22 (IANS) Cricket Australia (CA) Saturday opted to rest pace trio Mitchell Johnson, Peter Siddle and Josh Hazlewood for the upcoming Sheffield Shield round matches, keeping in mind the upcoming Test...
Read more on Sport Balla