Wednesday, August 27th19.4°C
23003
22455

Report: Apple nearing $3.2 billion deal to buy Beats Electronics' popular line of headphones

SAN FRANCISCO - Apple is orchestrating a $3.2 billion acquisition of Beats Electronics, the headphone maker and music streaming distributor founded by hip-hop star Dr. Dre and record producer Jimmy Iovine, according to a published report.

Citing people familiar with the negotiations, The Financial Times says Apple could announce the deal as early as next week. In its report posted online late Thursday, the newspaper warned the talks could still collapse if the two sides can't agree on some final details.

Both Apple Inc. and Beats Electronics declined to comment to The Associated Press.

The potential acquisition would add Beats Electronics' popular line of headphones and music streaming service to an Apple line-up that already includes digital music players and the iTunes store, the world's top music retailer.

If the deal is completed, it would be by far the largest purchase in Apple Inc.'s 38-year history.

The Cupertino company has traditionally seen little need to buy technology from other companies, reflecting Apple's confidence in its ability to turn its own ideas into revolutionary products such as the Mac computer, the iPod, the iPhone and the iPad.

But Apple hasn't released a breakthrough product since its former CEO and chief visionary, Steve Jobs, died in October 2011. The innovative void has increased the pressure on Jobs' hand-picked successor, Tim Cook, to prove he is capable of sustaining the success and growth that turned Apple into the world's most valuable company and a beloved brand.

Cook has shown a willingness to spend more of Apple's money than Job ever did. Among other things, Cook began paying Apple stockholders a quarterly dividend and has progressively committed more money to buying back the company's shares.

Apple's pursuit of Beats Electronics is the latest indication that the company is having trouble generating growth on its own. Apple already sells Beats Electronics gear in its stores, giving the company insights into how much the trendy headphones and other audio equipment appeal to its customers.

The negotiations also are taking place as the music market increasingly tilts toward streaming and away from the downloads that once drove the success of Apple's digital music store, iTunes.

U.S. revenue from downloads — which iTunes dominates — dropped 1 per cent to $2.8 billion in 2013, while streaming music revenue from the likes of Pandora and Spotify soared 39 per cent to $1.4 billion, according to the Recording Industry Association of America.

While downloads still command 40 per cent of the market, streaming revenue now accounts for 20 per cent of total revenue, up from just 3 per cent in 2007.

Beats Electronics LLC was founded in Santa Monica, California in 2008 by Dr. Dre and Jimmy Iovine. Its headphones were manufactured by Monster Cable until the two companies parted ways in 2012. The headphones have become a bit of status symbol worn by celebrities as well as audiophiles.

In 2012, Beats bought streaming music service MOG, which it transformed and relaunched as Beats Music earlier this year. The launch was fueled by a landmark partnership with AT&T that allowed up to five family members to pay $15 a month for the service as long as they were AT&T wireless customers. The deal broke the industry mould of charging each person $10 per month.

___

AP Business Writer Ryan Nakashima in Los Angeles contributed to this story.

The Canadian Press


Read more Business News

23015


Recent Trending




Today's Market
S&P TSX15619.21+20.47
S&P CDNX1015.367.12
DJIA17106.7029.83
Nasdaq4570.637+13.289
S&P 5002000.02+2.10
CDN Dollar0.9177+0.0048
Gold1281.10+3.7999
Oil94.11+0.25
Lumber349.50+0.30
Natural Gas3.959+0.048

 
Okanagan Companies
Pacific Safety0.180.00
Knighthawk0.01-0.005
QHR Technologies Inc1.190.00
Cantex0.07+0.005
Anavex Life Sciences0.25-0.007
Metalex Ventures0.075-0.005
Russel Metals36.62-0.32
Copper Mountain Mining3.03+0.02
Colorado Resources0.175+0.005
ReliaBrand Inc0.115+0.02
Sunrise Resources Ltd0.0250.00
Mission Ready Services0.250.00

 



23015

FEATURED Property
20524583619 Veranda Court
3 bedrooms 3 baths
$2,050
more details
image2image2image2
Click here to feature your property
Please wait... loading


How much mortgage should you carry?

There are several things to consider when deciding how much home to buy. 1. Draw up a budget including the new mortgage payments. While the rules used by most lenders require that the mortgage paym...


What is a journey without a destination?

Photo: ContributedI would call it a joy ride... You see a planned project or business has a destination. It may be an ongoing revenue stream, it may be a business value or an exit strategy. If you don...


Joint accounts: what you need to know!

Establishing a joint account may seem like a great strategy at first glance. However, there are many factors that must be considered before taking this action. This article will explore the use of &ls...

_








Member of BC Press Council


22837