As per various media reports, tech giant Apple is all set to take over music-streaming service provider and headphone maker, Beats Electronics. The reports claimed that the smartphone provider could pay up to a sum of nearly $3.2bn, with a deal that could be announced next week. Both the companies are in the process of negotiating details and the envisioned deal is on course to fall through.
Apple has been in the lookout for a subscription based music service in the market. The company needed to enhance its “iRadio” ad-based offering that was launched last year. It was an attempt by the company to stamp its authority in the music-streaming arena.
Beats Electronics was founded seven years ago by music producer/rapper Dr. Dre and fellow music icon Jimmy Lovine seven years ago. Since then, they have launched a high-end series of headphones in the market.
While launching Beats Music (a premium music-streaming service) in January, Lovine had made a statement saying “with the headphones, we hit an emotional chord with hardware. Now, it’s all about completing a circle and giving people the full experience of music.” This service may have proven to be very appealing for Apple, with the popularity of the iTunes service appearing to falling.
Apple has already been selling Beats products in their retail stores. In the last month itself, Beats began offering a way to subscribe to its streaming music service using Apple’s in-app purchase, something that gives Apple a cut of its subscription revenue.
In last month’s quarterly earnings conference call, Cook revealed that Apple made 24 acquisitions over the past 18 months. Considering that the company has not exceeded $1 billion for any acquisition, the rumored $3.2 billion purchase of Beats would be unprecedented. He further stated that they were in search for other acquisitions that could enhance the company’s existing and future products.