Apple Reportedly Nearing $3.2B Purchase of Beats Electronics.
Apple seems to be closing in on acquiring headphone developer and music-streaming service Beats Electronics for a total of $3.2 billion, in what people have been saying to be the largest purchase ever by the iPhone maker, a person close to this recent matter stated.
This deal would give the smartphone developing company a stronger foothold within the music-accessories business and would bolster Apple’s online music capabilities. Music has been one of the many cornerstones for the Cupertino-based company’s business, with its iTUne store and the iPod music player that reignited Apple’s growth more than a decade ago.
While its smartphone devices may be more important to its business, Apple continues to integrate new features around its music source. The company had 63 percent of the paid digital download market, according to a research done by the NPD Group during last year.
If the acquisition goes through, this would show that Apple is becoming serious about introducing a music-subscription service. iTunes is one of the world’s largest seller for music, but is only for downloads of sing tracks and album. In contrast, Beats during the earlier year had revealed a music subscription service that cost a total of $9.99 a month, allowing user to have unlimited access to all the songs in its catalog. Beats also features playlists made by musicians and DJs.
During the previous year, Apple had introduced iTunes Radio, which is an advertising-supported online music streaming service that competes against other music services like Pandora.
Tim Cook, Chief Executive Officer, has stated that he isn’t against going along with this deal and has made over 24 purchases during the past 18 months. The company typically purchases small companies, follow by shutting them down, then incorporates the team and technology into Apple’s own product line.
“We are not in the race to spend the most or acquire the most,” Cook said on the company’s earnings call last month.