Apple reportedly looking to purchase Beats Electronics for $3 billion

Daniel Bader

May 8, 2014 6:11pm

In a deal that could be announced as early as next week, Apple is reportedly looking to purchase Beats Electronics, the company for which HTC paid $300 million for a 51% stake three years ago, for $3.2 billion.

Yes, Apple is reportedly set to pay over five times the amount that Beats was valued at ($600 million) in 2011, though since then the Dr. Dre/Jimmy Iovine business, which is still private and doesn’t report revenue, has growth significantly and, earlier this year, launched a streaming music service. HTC subsequently sold its remaining ownership in two separate transactions, and currently has no share of Beats Electronics.

Apple made 24 acquisitions in the past 18 months, but none of them were as big as this one has the potential to be. The deal would reportedly include the company’s streaming service on top of the electronics play, which has garnered massive attention in recent years thanks to Dr. Dre’s public face.

Apple also has a relatively close relationship with Beats, offering the company’s products at its online and retail stores. Beats’ streaming service is not yet available in Canada.


Update: Beats might be swallowed up by Apple in a massive $3.2 billion deal. This was the rumour that spread fast on the internet yesterday, but seems to be confirmed by Beats co-founder Dr Dre on Facebook. In a minute and a half long video uploaded by Tyrese Gibson, in which Dre is present, states he’ll be the “first billionaire in hip-hop.”

Gibson boasted that “How did I end up in the studio with Dr Dre ON THE night his deal went public that he did with Apple 3.2 BILLION!!!! The BEATS HEADPHONES JUST CHANGED HIP HOP!!!!!” The post has since been deleted from Facebook.

There is no word on what Apple plans to do with Beats… or how close the deal is to being completed. – IH


Update #2: According to a report in the New York Post, via AppleInsider, the deal between Apple and Beats will officially be announced sometime this week. While it was expected that the price tag will be a record $3.2 billion, sources stated that “Apple hadn’t even begun its due diligence process when news of the number came out.” The price has reportedly dropped by a couple hundred million to $3 billion due to lower than expected subscriber numbers for its streaming music service.


SourceFinancial Times (Sub)
Via CNET

  • JB

    They unite to create the ultimate brand for suckers.

    The Hipsters are going to be pissed……

    • whoajohnny

      i don’t know about you guys but Beats headphones are one of the best out there. I have the Beat studios and boy do they rock and they also look pretty cool. All the other headphone mfgs are trying to rip off the beats headphones. name me a headphone that’s better than beats – and don’t say the company name like bose – actually name a headphone that is better – you can’t.

    • Max Fireman

      Can’t tell if this is serious?

    • hyperhyper

      I know… Perhaps he also thinks that Monster branded cables are the best as well?

    • peekabo

      sounds like you low income minions cannot afford good branded headphones so you complain that they are garbage. are you also going to argue that a Jaguar and Audi are overpriced and overhyped compared to a Kia Rondo?

    • Jakob

      Haha, Kia Rondo. Of all the crappy cars to pick on, I applaud your choice for ragging on the Rondo.

    • Mohamed Abdourahman

      My 100 dollar seinheiser headphones are way better than beats. Your clearly trolling.

    • icyhotonmynuts

      You’re*

    • HeyYoWL

      Lol.. So you’re all for pirating and not paying for your movies so that you can save your money for Beats? Wow.. I don’t even know what to say to that..

    • Keith

      I’m sitting here in front of my $1600 computer, without talking about audio, peripherals, or screens, and I still think they’re terrible. I’m by no means rich, but money isn’t scarce. If I want something, I’ll save and buy it.
      That’s what I did with Beats. I used them for a year and a half, and returned them. Their sound quality is sub par, and after some time it occurred to me that all I did was buy the logo.
      They’re bad, you just can’t come to terms with it.

    • Benny X

      I can come to terms with it without having to waste money on them.

      It’s called research.

    • Benny X

      like Max, I can’t tell if this is serious….

    • Benny X

      peekabo, let me guess, you’re using an iPod/iPhone with those crappy Beats aren’t you?

      that configuration alone disqualifies you from being the discerner of quality.

      i can tell you right now, for $100 at the most you can buy a player + in-ear headphones that will run rings around whatever it is you are using.

    • theKneeArrowTaker

      At 200 dollars (or 300), Beats is nothing like Audi or Jaguar at all. It is more like Kia Rondo, for “low income minions” like you.

    • johentie

      really??? unless your some teenager that requires BASS levels jacked up on steroids just to blow out your ear drums… my low end $120 audio technica ath-m50 sounds MUCH better then any beats model… dont forget Seinheiser who makes amazing headphones…

    • Mäuri Freitas

      Lol, is this some kind of joke? Ever heard of grado, sennheiser, shure, akg, just to name a few lol

    • Benny X

      hell you don’t even have to go that far up the quality scale to find something that puts Beats to shame. $50 in-ears will do it quite easily.

    • Mohamed Abdourahman

      Seinheiser, which are my personal favorites are way better and heck 99% of the posters will agree that audio technica headphones are way better.

    • icyhotonmynuts

      I’m rockin’ a pair of Koss TD-61s that I found in the trash. They’re pretty awesome, and significantly less than the Beats Studio’s with a tag of $200+.

    • Illicit Gaines

      What does $600 worth of cool look like?

    • TrainAss

      You bought a logo. Just like Monster branded items. You’re buying an expensive logo.

    • johentie

      hahaha i was just going to write something along this line!! Gimmicky device buys a gimmicky headphone…. match made in HEAVEN!

    • peekabo

      apple could have just bought blackberry for that much.

    • Benny X

      they should have bought Bose as well and put them out of our misery.

    • barrist

      Maybe Blackberry can hire another useless “Global Creative Director” like Alicia Keys to counter this move.

  • M-Len

    Beats are overpriced and under perform, they’ll fit right in at Apple! lol

  • Super_Deluxe

    Overpriced crap. Bose are cheaper and are much better.

    • Keith

      If it doesn’t have highs, and it doesn’t have lows, it must be a Bose.

    • alphs22

      You counter an overpriced brand with another overpriced brand.

    • Super_Deluxe

      Atleast it has quality. I’ve had my bose earbuds for almost 3 years now while my old beats tours didn’t last for a year. I don’t pay for just looks but also quality.

    • alphs22

      If you’re actually buying Bose and Beats headphones, you should start doing more research before buying any more headphones. head-fi would be a start.

      Plenty more brands that give you more bang for your buck.

    • HeyYoWL

      Just because they lasted doesn’t make them good quality. It just means they’re built to standard quality. Both are awful at actual sound quality though.

    • barrist

      Lol… Bose are not that much cheaper and not much better. Do your homework.

  • Matt

    I thought beats is owned by HTC now

    • johentie

      HTC had 50.1% and invested ~$300 million… they sold it for $150 Million…

    • MatroXX

      they used to have 25.1% shares…so if HTC still had that share they would have probably made a cool ~$803 million

  • Collin dubya

    This just solidified that i will never purchase a beats product.

  • ABCONMan

    Garbage headphones and Apple. A match made in heaven.

    • hyperhyper

      I wouldn’t say that the headphones are garbage but they are way overpriced for what you get. I personally think its a smart move by Apple. Most of their customers have no clue of what quality is and they think you have to overpay to get good stuff so good on Apple for knowing their audience. I personally would never buy a pair because of the cost but I also wouldn’t buy a Rolex because I don’t feel like paying for the name. I’m past that point in my life but I understand that it is a rite of passage for many.

  • Mo Dabbas

    Beats by Tim Cook?
    I know a lot bash the brand, but they provide good headphones. Granted it is overpriced, and not as good as many products in the same price range. But if they sell at that price why would they lower it?

    • TrainAss

      Just because something is expensive, doesn’t mean it’s good. It just means that suckers will buy it at that price point. There are people out there who associate good quality with high price. Beats are for them.

  • Jonathan Schmitt

    Overpriced company buys overpriced company? Sounds about right!

  • Jon Yen

    lol maybe Beats has a patent which Apple can use to sue Samsung

    • Ren596

      LOL
      That’s Probally The Reason

  • mwahahahaha

    PURCHASE THIS –> (__|__) !!

  • HD Z

    wow, Apple is going down.
    Beats is shiit They were “cool” 4 years ago.

  • HD Z

    What’s the point…
    What beats is doing that any other head phone compagny can’t do ?

    • alphs22

      Sell more premium headphones better than anyone else?

    • FlamesFan89

      “low quality” isn’t spelled p-r-e-m-i-u-m. ;)

    • alphs22

      I don’t disagree they’re poor quality for the price. Wouldn’t buy them myself. They do sell well though.

    • FlamesFan89

      I agree fully. You’d swear they were toilet seats, everyone’s got one, but compared to the other major players in the headphones game, far superior headphones can be had for the same price, or most often, much lower price.

      I think this is why it is somewhat amusing that it is Apple that is buying them. Apple makes good products, there is no doubt about that, however there are other products on the market, that are just as good, that can do everything the iPhone (and other associated products) can do, and then some, at a similar or often lower cost. Beats, much like Apple, has been extremely successful in creating a brand that sells. A brand that the majority of lay-people assume has a higher than most quality, when in fact, the quality isn’t necessarily bad, it’s just not as high as the branding suggests, and public perception suggests. You can’t just be a brand alone, you have to have at least SOME level of competency to support the brand, but in both the case of Apple and Beats, I would say that the brand far exceeds the ACTUAL quality level of the products in comparison to competitors, and as such, they have been successful in charging a premium.

    • TrainAss

      You misspelled overpriced.

    • Zomby2D

      Sell cheap products at a premium price? This is exactly Apple’s niche.

  • DJRiful

    lol Beats, there are better audio products than beats at a better price. This is like Nike, add a tick on the shirt -> $60.

    • Benny X

      made in china for $1. sell in North america for $60.

      The American Way!!!

  • Mohamed Abdourahman

    Frankly why didn’t apple just buy either audo technica, bose or Seinheiser(my personal favorite) ? cause frankly those companies make way better headphones. However apple’s earpods are some of the worst headphones ive ever used so at least beats algorithms will be able to at least marginally improve apple’s earpods.

    • hyperhyper

      I like Seinheiser as well. I’ve always been impressed with them and they are decently priced.

  • hyperhyper

    I think Beats is a decent product but there a few things to consider. Beats was cool several years ago before every tween started asking for them. I think the appeal is that they cost big money and they are highly visual to others which does well for those who equate coolness with expensive products.

    Never mind that Beats is to earphones what Monster was to audio/visual cables. It’s a decent product but there is no better way than saying “Sucker” than buying something that costs 3-5x the amount of what a comparable product would cost.

    Sound quality is all about personal tastes so someone telling me that X product sounds better than Y product when they are pretty damn close in quality is barking up the wrong tree. Now I’m not saying that the $20 pair of heaphones would compare to the $379 pair of Beats headphones but I would think if you put 4-5 $180-$200 pair of headphones in a blind headphones test, people would be hard pressed to pick out the Beats ones.

    • Benny X

      $50 in-ears would beat the Beats, no problem. Not all in-ears at that price, mind you, but it can be done.

  • Zee

    Jimmy Iovine is one smart guy if this deal closes at that price.

  • Zomby2D

    Yes, just like Walmart… they also have a close relationship with Beats, offering the company’s products at their online and retail store.

  • Rimtu Kahn

    By buying beats apple is buying more fans…. That’s all. Beats headphones represent similar business model to that of apple’s. Package inferior products really nicely and put a premium price tag on it to make suckers and blondes want it really bad.

  • peekabo

    all the fandroid android fans are coming out and bashing apple. lol

    • Gohy

      Except Beats was owned by HTC and it did absolutely nothing for them so the sold it back. So….

    • Benny X

      we’re bashing Beats, not Apple. and deservingly so.

  • Me Ted

    Why would Apple do this? Beats branded products are terrible. I bet for less money, Apple could come up with something vastly superior…a product more in line with – say – Sennheiser.

  • Gohy

    Coming up tomorrow: Apple will sue the former Beats owners HTC for using Beats on their phones claiming they invented it. All HTC One phones will have to have the Beats logos removed.

    Also iphone users will claim that their phones sound so much better now that they have beats integrated

  • Jeffery Smith

    I read comments on forums and I have no idea why people are mad at Apple for buying a company…3.2B is pocket change for Apple. I personally would never buy a beats headphones but Apple knows that kids will buy it becuase it’s a fashion statement, just like, guess what! …an iPhone. SO in my opinion smart move by Apple and who cares.

    • FlamesFan89

      People aren’t mad, they are laughing and shaking their heads.

    • Illicit Gaines

      $600 fashion statement? A plastic coated wire that hangs from your ear?

    • Illicit Gaines

      Smart move by Apple swallowing a scam company before they go bankrupt?

  • Illicit Gaines

    For every REAL product there’s a FAKE, BETTER product (yes, made Exclusively for you poor suckers out there who think spending $600 on a wire covered with plastic is a better deal than feeding your own kids.) This proves that you’re smarter, & richer than ANYBODY else! But wait!! If you act now……

  • Illicit Gaines

    What exactly is “beats technology”? Turn up the bass and charge $600?
    Monster Cable? Music subscription service? ipod+beats = ibeats? Will itunes just go away?

    • Illicit Gaines

      Im replying to myself as after extensive googling i have discovered that the ‘beats’ purchase is a ploy by Apple to restock their declining itunes subscription service with a new generation sucker list, willing to pay too much for a music subscription service coupled with overpriced hardware. ARE YOU on Apple’s sucker list?

  • J-Ro

    This makes sense. Premium brands merging to create one large premium brand. iTunes music subscribers might even get exclusives from Interscope thanks to this deal. Might not be bad for them in the long run.