Apple Buys Beats: iPhone Maker's Purchase Of 'By Dre' Headphones Will Combat Spotify? [Rumors]

By Matthew Buzzi , Updated May 09, 2014 02:47 PM EDT
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Apple is reportedly set to complete a $3.2 billion purchase of headphone maker Beats Electronics, popular for its expensive and stylish "Beats by Dre" headphones. The move would represent Apple's largest ever acquisition of another property or company.

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Apple's purchase would not only net them the headphone-making portion of the company, but also the Beats Music streaming subscription service. The Financial Times first reported the offer, and several publications (such as Bloomberg) have since confirmed the attempted move with their own private sources. It's not a complete deal as of yet, with Apple expected to close on the acquisition as early as next week.

Apple has been selling Beats headphones in its retails stores already, and recently began offering a subscription to Beats Music through iTunes.

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The purchase will allow Apple to benefit from the headphone sales, but the Beats Music portion of the deal may turn out to be the most important, I think. Apple could leverage the service alongside iTunes Radio to combat the success of Spotify, though the two use differing models.

Beats Electronics was founded in 2008 by famous rap icon and producer Dr. Dre and record executive Jimmy Iovine, who reportedly met with Apple several times in the negotiations of this deal.

The company has made a huge impact in the high-end headphone and audio technology movement, though many technophiles would warn you that Beats headphones are lacking in sound quality. If there was an ideal match for a company that can sell electronics at a premium based on brand name, though, it would be Apple. Stay tuned for official word on the completion of Apple's purchase.

TAG Apple, Beats
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