All those rumors were true, Apple went for Beats Audio and got it for $3 billion, which is $200 million less than what was previously suggested. Of the complete sum, $400 million of that amount will vest over time. And as part of the deal, Beats Audio’s co-founders, Jimmy Iovine and Dr. Dre, will be working for Apple for some time.
Dre is obviously pleased with Apple’s decision saying that he’s financially now in place he “never dreamed of.” Yet again, he’s “just ready to get started with the work.”
For those who count, this is Apple’s biggest acquisition to date. Thus far, the Cupertino giant only went for smaller companies for their tech and talent. This time, it’s different and chances are they’ll use the new brand to rejuvenate music sales.
“This is a big deal. But to put it in some perspective, we acquired 15 companies last year and 12 this year, some 27 in 18 months,” said Apple’s CEO Tim Cook. “But this one is all about music, which we’ve always felt is in our veins and we’ve always appreciated that technology alone was not enough.”
On the heels of the deal, Beats music service extended the free trial period from 7 to 14 days, while slashing the annual subscription price to $99. That’s $20 off.
Beats offers mobile app for three of the most popular platforms, including iOS, Android and Windows Phone. It has around 111,000 paying subscribers but something tells us they’ve just started to explore the market. Its headphone business generates more than $1 billion in revenues.
It remains to be seen whether Dre and Cook can make for a dynamic duo and convince many more users to subscribe to Beats. Or however, it ends-up being known after the acquisition.