Apple Beats acquisition formally announced
Beats Music and Beats Electronics moving to Cupertino for a cool $3bn
Following weeks of speculation, Apple has formally announced plans to acquire Beats Music and Beats Electronics for a total of $3bn.
The Beats Music team - which handles the Beats streaming service - will report to Eddy Cue, Apple's senior vice president of software and services, according to a memo from Apple CEO Tim Cook. Meanwhile, the Beats Electronics hardware team will report Phil Schiller, vice president of worldwide marketing at Apple.
When it comes to Beats Music, Cook said that he believed Beats is the first subscription service "to really get it right," and said that the addition of Beats to iTunes would make the line-up even better.
As part of the deal, Beats co-founders Jimmy Iovine and Dr. Dre will also join Apple, with the aim of bridging the gap between Apple and the music industry.
"The ugly truth is that there is such a Berlin Wall between Silicon Valley and LA," Cook was quoted by the Wall Street Journal as saying.
"The two don't respect each other, don't understand each other."
On the hardware front, Apple said that Beats Electronics produced some of the best-selling third-party products that appear in Apple stores. Beats' Iovine said that it made perfect sense for the company to find a new home for itself at Apple.
"I've always known in my heart that Beats belonged with Apple," he 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."
Subject to regulatory approval, the transaction is expected to close in Apple's fiscal fourth quarter.