Apple reportedly eyeing Beats acquisition

Deal worth $3.2bn could be announced as early as next week, reports say

Tags: Apple IncorporatedBeats Electronics (http://ae.beatsbydre.com/)Mergers and acquisitions
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Apple reportedly eyeing Beats acquisition The deal, said to be worth $3.2bn, would be Apple's biggest ever acquisition.
By  Tom Paye Published  May 9, 2014

Apple is in talks to acquire Beats Electronics, the personal audio manufacturer and music service, according to a report in the Financial Times.

The deal, said to be worth $3.2bn, would be Apple's biggest ever acquisition.

According to people close to the negotiation, the deal could be announced as early as next week, the FT report said. However, it also cautioned that some details remained unclear, and that negotiations could still fall apart.

A Beats acquisition would be uncharacteristic of Apple, which usually makes low-profile buys of smaller companies without much fanfare. Last month, CEO Tim Cook said that Apple has acquired 24 companies in the past month, the details behind which are unclear.

Likewise, there are scarce details around Apple's motives for acquiring Beats. Some industry insiders claim that, rather than the personal audio technology that Beats has developed, Apple is more interested in Beats ties to the music industry, which it could use to strengthen its iTunes offerings.

"I can't see Apple keeping the ‘Beats' brand around for headphones. If Apple wanted to sell expensive high-end headphones, they don't need to spend $3 billion," wrote John Gruber, a well-known Apple watcher.

However, Gruber also noted that, while the Beats streaming service is "interesting", Apple could probably be capable of launching its own streaming service as an extension of iTunes, without Beats. And in response to claims that Apple is interested in the music streaming licences that Beats has acquired, he wrote that he assumed those licences would be non-transferrable in the event of a buyout.

Indeed, independent analyst Ben Thompson tweeted that Apple could be far more interested in the technology behind the headphones themselves.

"Everyone assumes that this deal is about the streaming services, with headphones thrown in. I think that's backwards," he wrote.

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