Apple Buys Beats Audio

Shay Lari-Hosain

Apple Inc. acquired Beats Music and Beats Electronics last Wednesday for over $2.6 billion up front and $400 million in stock. Founded in 2008 by artist Dr. Dre and Interscope/Geffen/A&M Records chairman Jimmy Iovine, Beats has become best known for its iconic headphones, speakers, and audio systems.

On the street, there is a jogger with Beats earbuds plugged into their iPhone. In the studio, an artist mixes a song on a MacBook Pro and Beats headphones. The two companies’ products are frequently used together, but no one suspected what would happen next.

Two days ago, Apple Inc. finalized plans to acquire Beats Music and Beats Electronics LLC for $3 billion. With this purchase, Apple now owns Beats’ popular headphone line and its counterpart online streaming service.

In a surprising turn for the company, Apple will continue to use the Beats moniker.  Ryan Pachauri (11) agreed with this decision.

“[Apple] shouldn’t do any rebranding or anything, because people like Beats as it is,” Ryan said. “Beats already dominates [the industry].”

Most importantly, Apple gains Beats cofounders Jimmy Iovine and Dr. Dre, two of the most well-connected executives in the music industry. Dr. Dre (Andre Young) is one of the industry’s most prominent artists and producers. Iovine, 61, will step down from his position at Interscope Geffen A&M to work for Apple. In the past, the music executive has collaborated with former CEO Steve Jobs on various releases, including the iTunes Store in 2003.

“I’ve always known in my heart that Beats belonged with Apple,” Iovine said in an Apple press release. “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.”

Shivali Minocha (10) suggested that the merger is beneficial for Beats’ hardware line.

“I think [the Apple-Beats deal] is a good idea, because Beats aren’t necessarily that great quality, and Apple tends to make decent quality products,” Shivali Minocha (10) said. “They’ll probably improve the quality of Beats.”

Critics of the purchase believe that it promotes materialism, due to Apple and Beats’ status as fashionable brands.

“I think it’s a terrible deal, because Beats are completely overpriced and overhyped, and it shows the real flaw in American consumer culture today,” said Sanil Rajput (10).

Apple announced that the deal will be completed in quarter 4 of the fiscal year. For now, Beats Music, as well as the Beats hardware experience will remain the same. Only time will tell as to what Apple and Beats will conjure up in the future.