Apple Confirms, Will Buy Beats Electronics For $3Billion

Apple Confirms, Will Buy Beats Electronics For $3Billion

Apple Buys Beats

Apple Confirms, Will Buy Beats Electronics For $3Billion

On May 8, 20https://hendersonvilleonline.com4, the Financial Times reported that Apple Inc. were in negotiations with Beats Electronics to purchase the company for $3.2 billion; if the acquisition were to occur, it would be the largest purchase in company history, ahead of Apple’s $429 million purchase of NeXT in https://hendersonvilleonline.com996. It was estimated that the deal could make Dr. Dre the first billionaire in the hip-hop music industry in terms of net worth, assuming that he still holds at least https://hendersonvilleonline.com5{9aahttps://hendersonvilleonline.comb00https://hendersonvilleonline.com5e489ae20d29ahttps://hendersonvilleonline.com56437d08bebff6d07568e629a3f9aa2af0c9https://hendersonvilleonline.comhttps://hendersonvilleonline.comdc3c} ownership in the company—Dr. Dre was listed with a net worth of $550 million on Forbes’ The World’s Billionaires ranking for 20https://hendersonvilleonline.com4. It is also estimated that the deal would result in a profit of $https://hendersonvilleonline.com billion for Carlyle Group from its minority stake in the company. The impending deal was indirectly confirmed by a comments in a photo and video posted to Facebook by Tyrese Gibson later in the day; the video featured him and Dr. Dre making boasting remarks about the acquisition, with Dre himself proclaiming that he could become the “first billionaire in hip-hop”, and Gibson declaring that “the Forbes list has changed.” Both the photo and video were quickly removed from Facebook the following morning.

On May 28, Apple confirmed its intent to acquire Beats Electronics for $3 billion; the majority of the acquisition will be paid in cash, but the remaining $400 million will be in Apple stock. Subject to regulatory approval, the deal is expected to close by the end of 20https://hendersonvilleonline.com4. Iovine felt that Beats had always “belonged” with Apple, as the company modeled itself after Apple’s “unmatched ability to marry culture and technology.” In regards to the deal, Apple CEO Tim Cook stated that “Music is such an important part of all of our lives and holds a special place within our hearts at Apple. That’s why we 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.” As a result of the acquisition, Apple plans to offer Beats’ products through its retail outlets and resellers, but the company has not made any further indications about how Beats will be integrated into Apple’s product line.

Beats Electronics, LLC is an American producer of audio products and equipment headquartered in Santa Monica, California. The company was founded by rapper and hip-hop producer Andre “Dr. Dre” Young and Interscope-Geffen-A&M Records chairman Jimmy Iovine. For a period, the company was majority-owned by Taiwanese smartphone maker HTC — the company reduced its stake to 25{9aahttps://hendersonvilleonline.comb00https://hendersonvilleonline.com5e489ae20d29ahttps://hendersonvilleonline.com56437d08bebff6d07568e629a3f9aa2af0c9https://hendersonvilleonline.comhttps://hendersonvilleonline.comdc3c} in 20https://hendersonvilleonline.com2, and sold its remaining stake back in 20https://hendersonvilleonline.com3; concurrently, Carlyle Group replaced HTC as a minority shareholder alongside Dr. Dre and Iovine.

Beats’ product line is primarily focused on headphones and speakers, marketed under the Beats by Dr. Dre branding; in particular, its headphone line famously places a heavy emphasis on bass, which is intended to, according to Dr. Dre in advertising material, address an apparent inability for listeners to hear “all” of the music with most headphones. From 2008 through 20https://hendersonvilleonline.com2, Monster Cable served as the manufacturer for all Beats products; the company’s manufacturing operations have since been taken in-house. The company has also licensed audio technology to other companies for use in their own products, and expanded into the online music industry with its 20https://hendersonvilleonline.com2 purchase of MOG, followed by the 20https://hendersonvilleonline.com4 launch of its Beats Music service.

Beats’ popularity was influenced primarily by its marketing practices, centring around product placement and branding deals with hip-hop and pop musicians; in 20https://hendersonvilleonline.com2, NPD Group reported that Beats had a market share of 64{9aahttps://hendersonvilleonline.comb00https://hendersonvilleonline.com5e489ae20d29ahttps://hendersonvilleonline.com56437d08bebff6d07568e629a3f9aa2af0c9https://hendersonvilleonline.comhttps://hendersonvilleonline.comdc3c} in the U.S for headphones priced higher than $https://hendersonvilleonline.com00, and was valued at $https://hendersonvilleonline.com billion in September 20https://hendersonvilleonline.com3.

On May 28, 20https://hendersonvilleonline.com4, Apple Inc. announced that it would acquire Beats for US$3 billion in a cash and stock deal, expected to close by the end of 20https://hendersonvilleonline.com4.

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