Apple is about to conclude a deal in which it will buy Dr. Dre’s headphone maker and music-streaming service.
The smartphone maker is in talks to buy Beats Electronics LLC for $3.2 billion, in what would be the largest-ever acquisition.
A move to acquire the business founded by Jimmy Iovine, a music-industry executive and hip-pop music producer Dr. Dre, would enhance Apple’s grip of the online music market by giving the iPhone maker control of the Beats Music service, which was founded early this year, Bloomberg reports.
Beats Music offers a $10 per-month subscription service, which gives customers unlimited access to all listed songs via a smartphone, tablet or PC web browser.
While representatives from Apple and Beats have not confirmed the reports, a YouTube video features Dr. Dre suggesting the deal and saying, “the first billionaire in hip-hop, right here.”
Music has served as a pillar of Apple’s business, with the backing of iTunes store and the iPod music player which revived the firm’s fortunes more than 10 years ago.
However, online music download sales flopped for the first time ever in 2013 as listeners switched to streaming services such as Spotify Ltd, YouTube and Pandora.
“The age of digital downloads is basically over,” said Aram Sinnreich of Rutgers University.
Apple’s balance sheet indicates a whopping $150.6 billion in cash and assets, dwarfing the $3.2 billion it will inject towards the acquisition of Beats Music. However, the deal demonstrates that the firm is serious about launching its own online music streaming service to compete with Spotify.
Apple co-founder Steve Jobs had been for a long time against such a move, arguing that musicians don’t want to lease their music.
According to CBS, Apple has traditionally never seen a reason to acquire technology from outside as a sign of confidence in its own capabilities to produce revolutionary products.
To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
To contact the reporter of this story; Yashu Gola at firstname.lastname@example.org