From Compton to Cupertino. Even though everyone panicked when the drunken Tyrese and Dre video popped up, Apple dismissed it and has formally announced that it has acquired the Beats Electronic franchise for $3 billion, which includes $2.6 billion cash up front and around $400 million in stock. Dr. Dre and Jimmy Iovine will also join Apple with currently undetermined roles most likely in the creative departments.
“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” CEO Tim Cook said in a statement. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”
This acquisition is Apple’s biggest ever, and largest since it brought back Steve Jobs in 1997 though a $400 million purchase of NeXT. However, the $3 billion price is still just a tiny fraction of the company’s $150 billion cash reserves, and Beats’ estimated annual sales of $2 billion represents barely over 1% of Apple’s $171 billion revenue last year.
“I’ve always known in my heart that Beats belonged with Apple,” Iovine said. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”
The purchase includes not only the headphone and speaker arm of the business, but also Beats Music, the subscription streaming music service also under the Beats umbrella.
Hip-hop’s first billionaire or near-billionaire is celebrating today! Tons of cash in tow and a sweet new position at one of the world’s biggest companies.