Beats joins 'em: Apple confirms its $3B acquihire of Jimmy Iovine and Dr. Dre
Apple today confirmed that it plans to acquire Beats, the streaming music service provider and overpriced headphones maker, for $2.6 billion in cash and $400 million in stock. It is the company's largest ever acquisition, and it expects that the deal will be approved later this year.
The acquisition was first reported earlier this month, and has gone through tempestuous swings between apparent closure (as shown when Dr. Dre posted a video to Facebook in which he bragged about being the richest rapper in the world) and near disaster (as claimed by reports that Apple had serious reservations about the acquisition) in the last few weeks.
Beats will remain a separate entity after the acquisition, and Apple doesn't have any plans to suspend either its subscription music service or its headphones business. Its co-founders, Jimmy Iovine and Dr. Dre, will join Apple as part of Eddy Cue's Internet services division.
The New York Times reports that Apple isn't sure what Beats, Iovine, or Dre will offer it yet. Tim Cook, its chief executive, rebutted criticism of the deal by pointing out that Apple has acquired 27 other companies this year, and that even though it could make products similar to Beats' on its own, that the acquisition would probably prove as beneficial as those other deals.
For the moment, it seems that the acquisition is really an acquihire through which Apple will bring Iovine and Dre into the fold while introducing several redundancies to its own business. (The company has made headphones for years, and has developed streaming music services to complement the existing iTunes marketplace.) As Pando's James Robinson explained in a post comparing Dre to former RadiumOne CEO Gurbaksh Chahal, who left the company after he admitted to attacking his girlfriend, that might not be the wisest decision:
We all know there exists a double standard for celebrity crimes. Behavior that would be career-ending for a “regular” person is somehow accepted as part and parcel of the celebrity lifestyle, particularly in the music industry. Also, there will be some who argue that Young’s transgressions took place over a decade ago, as if there is a statute of limitations on taking pride on beating a woman while your bodyguard holds back a crowd.
Given the continuing focus on the experiences of women in the technology industry, and the outrage at other bad actors accused of abusing women, the question is what makes Andre Young different from Gurbaksh Chahal? And what makes Apple different from RadiumOne? [Photo credit: Brian Solis]