Tim Cook on Beats purchase: They ‘will help extend the Apple ecosystem in the future’

Daniel Bader

May 29, 2014 4:10pm

Tim Cook is pretty excited about Apple’s biggest acquisition to date. In an email to employees, he welcomes Jimmy Iovine, Dr. Dre and co. to the fold, saying that Beats Music and Beats Electronics will “complement our product line and will help extend the Apple ecosystem in the future.”

Apple is not shy about the fact that sales of its digital music ecosystem have dropped over the last few years, as more customers choose to subscribe to streaming services such as Beats, Rdio and Spotify. And while Apple could certainly have chosen to build its own a la carte streaming solution — it already offers a form of it in iTunes Radio — Cook and Eddie Cue, VP of Software and Services, said that Beats Music is “the first subscription service to get it right.”

“Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas.”

Cook also confirmed that Beats Music, which has 250,000 subscribers in the United States and is not yet available in Canada, will remain available for Android and Windows Phone.

As for the long-gone Beats/HTC partnership, Iovine was straightforward about its disastrous ending: “It was really a culture clash,” he said. “It crashed and burned. It didn’t work out.” HTC, at one point, owned a 51% share of Beats Electronics. HTC’s loss is Apple’s gain.

Finally, Cue said during an interview at the Code/Conference that Apple’s lineup for later this year is “the best product pipeline that [he’s] seen in [his] 25 years at Apple.”


This afternoon we announced that Apple is acquiring Beats Music and Beats Electronics, two fast-growing businesses which complement our product line and will help extend the Apple ecosystem in the future. Bringing our companies together paves the way for amazing developments which our customers will love.

Music is an important part of our lives and our culture. Music has the power to inspire us, to comfort us, and to send our emotions soaring. It brings people together and transcends the limits of spoken language.

Apple’s history in music began with selling Macs to musicians. That remains important to us today, but we also bring music to hundreds of millions of customers with iTunes, which is at the forefront of the digital music revolution. Music holds a special place in our hearts at Apple, and we know that we can make an even bigger contribution to something that is so important to our society. That’s why we have kept investing in music and why we’re bringing together these extraordinary teams — so we can continue to create the most innovative music products and services in the world.

Beats co-founders and music industry pioneers Jimmy Iovine and Dr. Dre will join Apple, along with their team of employees. Jimmy has been on the cutting edge of innovation in the music industry for decades, including as a key partner for Apple in the launch of the iTunes Music Store more than ten years ago. He has produced or collaborated with some of the most popular artists in history, and been an important contributor to the success of the iTunes Store.

Beats Music was built with deep respect for both artists and fans. We think it’s the first subscription service to really get it right. Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas. The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music.

The Beats Music team will report to Eddy. The teams will be getting to know each other better in the weeks ahead, and we are very excited about the possibilities for the future.

Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores. We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership.

Please join me in welcoming Beats to Apple. I hope you are as excited as I am about this new chapter in our history.


  • alphs22

    Huge gamble on subscription music streaming.

    • It’s Me

      Big money, no doubt, but relative to their size and revenue, it’s not a big gamble at all. It could crash and burn horribly tomorrow and it wouldn’t affect the financials much at all.

      Just seems like it cost a lot more than it it would have for them to build their own.

    • cartfan88

      With regards to music streaming…I think they have to move in that direction as it seems the next or current frontier in music. After using Deezer, rdio, Pandora and ITunes Radio…it was clear they needed some catch up. Could they have built it? Sure..but hard to know how long to would have taken. Time will tell.

  • Aaron L

    Beats headphones are terribly overpriced. I can’t imagine that Apple will make them more affordable.

    • JTon

      Yes I completely agree. Beats are not good value. I still see them everywhere tho..

    • marorun1982

      Just like ios device…

    • Boom, Boom, Boom

      Beats are not trying to make a value product. They positioned their headphones are a fashion accessory. It’s cool and the celebrities all wear them on the red carpets. Once you have the cool factor you can skimp on quality and raise the price.

      Remind you of any other iDevice?

    • MikeOxlong

      Boom boom boom. Time for your meds.

  • Rob D

    Good job Apple for trying to remain in the news. What they should do is bundle their phones with beats earbuds or something. Give people incentive to buy Apple products again. I doubt they will do that though. This just seems like a money maker by giving Apple and Beats a reason to continue ripping people off with mediocre tech.

    • Harold Mitchell

      Well, you don’t acquire a company for 3 billion to NOT make money

    • marorun1982

      Sometime yes you do…
      You acquire a company to stop others from making money 😉

  • Victor_Creed

    Tim Cook on Beats purchase: “Its just more overhyped, and overpriced garbage we can market the **** out of”

  • 5Gs

    Beats products are so expensive but i seen people buy it. We live in a generation where people would love to spend money on such gadgets.

    • PT

      A …. lost ….generation!

    • 5Gs

      I won’t exactly say lost. More like confused.

    • marorun1982

      I prefere to get stuff thats has a better price/quality ratio..

  • Collin dubya

    overpriced crap buying overpriced crap. no thanks.

  • Mo Dabbas

    hmm, now that I think of it. The reason why Beats became so popular is because you see it everywhere in the media (music videos, athletes, celeberties…. etc). Most of which were given to those individuals to promote the brand. If something similar is done to showcase apple products along with Beats in the media (with the help of Dre of course), then apple might have did a smart move after all.

  • d a

    I don’t get it, which may explain why I’m not in business, Apple has got one of the best brands, so that can’t be the reason, and the headphones are NOT technically that great according to 3 experts I’ve heard discussing the topic on 3 different occasions, so why not just do it themselves. I don’t get it. When I tried them I shrugged and thought, Ok, not bad but no way I’m spending that kind of money for headphones, when I can get the same spec for a third the price that don’t have a “b” on them.

  • Accophox

    Beats, most convincing offering in streaming services? Not sure I quite agree. Beats was a latecomer to the party, and better things have been said about competitors too (GPMAA’s I’m feeling lucky being more of a hit, for example. — but please change the name to something less… wordy, thanks. :>)

  • PT

    Never mind the sound. What about fixing the battery & the antennagate on going problems?

  • FlamesFan89

    I’ve never used the beats music streaming, as it isn’t available in Canada, but can anyone fill me (and anyone else who is wondering) what it is that makes it so much better?

    I’m on a free trial of Google all access right now, and it’s great. I can stream anything I want from all my devices. I can save songs/albums for offline play. And I can upload my own library of music so that it is backed up and available on any of my devices.

    I honestly am wondering what features others (Beats, Spotify, etc.) have that would differentiate them. Aren’t they all just streaming music for a subscription fee? I feel like I’m really missing the point of the Beats acquisition, because Apple should have easily been able to make a feature by feature version of the best of whats out there for cheaper than what they paid. There just seems to be something to this story that isn’t being told. Some piece of tech or software which brings all the value that hasn’t been mentioned yet.