Apple is reportedly close to closing a deal to buy Beats Electronics, a company most famous for its high-end headphones. According to the reports, Apple is expected to pay up to $3.2bn (£1.9bn) for the electronics manufacturer.
The acquisition agreement seems like it will go through in the next few days, but many reports are stressing that it could still fall through at this stage. If Apple does end up buying Beats Electronics, it will be the biggest purchase the company has ever made.
Beats Electronics is probably most known by many as the headphones company started by producer and rapper Dr. Dre and entrepreneur Jimmy Iovine. The company also launched a music streaming service earlier this year, so maybe this is what Apple is most interested in. However, Apple already has a music streaming service – iTunes Radio.
So what can Beats bring to Apple’s music business? Possibly it’s to do with record company licensing agreements, or maybe just an attempt to swallow up the competition for music streaming. Maybe it’s to do with getting Jimmy Iovine on board – he could definitely bring innovation to iTunes.
Apple usually buys out small starter companies for a few million, not well-established brands for billions of dollars. Many industry analysts have been questioning Apple’s motive for wanting to buy Beats Electronics. As the deal hasn’t gone through yet – and still might not – it’s unclear whether Beats would keep its own brand or if its products and services would all be renamed as Apple.
Would a Beats acquisition represent the direction that Apple is hoping to move in? Perhaps the iPhone 6 will be more music-focused, and would ship with Beats Audio built in. It’s all speculation at this point until the deal has officially closed. The acquisition could reportedly be officially announced as soon as next week, so we could hopefully hear something more concrete then.