Apple Confirms Purchase of Beats For $3 Billion

SimonTheSoundMan writes: "Apple has confirmed it will buy Beats Electronics and Beats Music for $3 billion. Apple will make the purchase using $2.6 billion in cash and $400 million in stock. An important part of the acquisition for Apple is absorbing the Beats subscription streaming service, even though it only has about 110k users. The Beats brand will remain intact, and will continue to sell headphones. "

Comments

Buying a streaming contract?

[kinarduk]

I know apple have tried hard to get the labels to sign up to a music streaming service. Perhaps they bought beats because it already had a contract in place with the major labels, thus removing all of the complicated negotiations?

Re:Apple has now jumped the shark

[sootman]

Wow. A 15-year climb from bankruptcy to the most valuable company in the world and people still look at every single move Apple makes and say "wow, that's fucking dumb." Isn't it just remotely possible that Tim Cook knows what the fuck he's doing, and that there's a good reason for buying Beats? How 'bout we give it a few weeks, huh? Maybe, just maybe, the guy running Apple knows something you don't, and perhaps we should give him the benefit of the doubt just this once and see how this plays out before passing judgement?

Sorry, I must be new here.

Besides: every move Apple makes doesn't have to be some earth-shaking road to an innovation unseen since the last amazing thing they did (which everyone shit all over at the time anyway.) If Apple buys Beats or Pepsi or Whirlpool or Nabisco or whoever for $3 billion and they make more than $3 billion off of that in the near future, then it was a good investment, right? Do you know what would make Beats worth $3 billion today? IF IT EARNS $5 BILLION IN THE NEXT FIVE YEARS. And oh, look, that's probably what will happen. (And note that Tim Cook probably has better financial info available than a year-old Fast Company article.) Maybe Tim looked at Dre's books and decided that with Apple's awesome buying power and manufacturing prowess that they could DOUBLE the profit of Beats OVERNIGHT. They might earn that money back by next Christmas.