Enterprise IT/Software

Apple 'in talks' to acquire Beats Electronics for $3.2bn

Software CBR Staff Writer

13:35, May 12 2014


Diversification beckons in effort to maintain growth .

Apple is reportedly considering acquiring high-end headphones maker and music streaming service Beats Electronics for $3.2bn.

Apple, which has more than $150bn in cash reserves, may announce the deal next week if the discussions are fruitful.

After its phenomenal success with the iPhone and iPad, Apple is under enormous pressure from its investors to deliver innovative products. The acquisition of Beats may help the company revive its product line, as it would provide Apple with a very popular product from a very well-known brand.

The deal, which would likely include the Beats Music streaming service, may offer Apple a chance to revive its dominance in the music market, which has been eroded by Amazon and other sellers in recent months.

Despite being the largest seller of downloads and with store operations in more than 100 countries, Apple has seen a significant drop in its music business revenues following changes in music purchasing. Consumers worldwide have shifted from one-off digital purchases, which use platforms like Apple's iTunes, to subscription services such as Beats Music.

Beats, established in 2008 by rapper Dr. Dre and music industry executive Jimmy Iovine, recorded annual sales of around $1.5bn in 2013, and also attracted $500 million investment from the Carlyle Group.

Apple's latest move marks a remarkable change in its strategy which so far shunned multi-billion dollar acquisitions. Tim Cook, who took charge of the company following the death of Steve Jobs, plans to expand Apple's products and services into new categories and is not afraid of huge acquisitions.


Post a comment

Comments may be moderated for spam, obscenities or defamation.