Apple to Buy Beats Electronics

According to the Financial Times, Apple will soon swallow up Beats Electronics, the maker of those ubiquitous headphones sported by everyone and their mother. Apple is reportedly buying the Dr. Dre-founded Beats Music for $3.2 billion. According to the FT, this would be the company’s largest acquisition ever. Apple already sells Beats audio gear in its stores, and sells Beats Music in its iTunes store.

Beats Electronics, in addition to selling headphones, recently acquired MOG and launched its own Internet subscription music streaming service in January, which competed with Apple’s iTunes Radio for market share. The service, Beats Music, did not come with an ad-supported version and was available for $9.99 per month.

Unlike other streaming services, however, the company did not offer personalized feedback options—iTunes Radio lets users mark songs as “Play More Like This” or “Never Play This Song.”

The service was also unique in that users could find their own unique playlist by filling in the blanks: “I’m _____ & feeling like ____ with _____ to ____.” Users could also choose curated playlists from Pitchfork, DJ Mag and even Peyton Manning. This is similar to web streaming services such as Songza.

According to Digital Music News, Beats Music had 525,000 paying subscribers in March.

Why would Apple lust after a company like Beats? The company must be looking to beef up its online radio service. It’s a crowded field out there, what with Pandora, Spotify, iHeartRadio and more eating up customers. iTunes radio launched in 2013, and similar to Beats Music, it invites artists and DJs to curate playlists. Many users have found iTunes radio to be similar to Pandora—perhaps there were too many players in that field. Beats tended to push playlists created by humans rather than those created by algorithms, which could be something Apple felt it was missing in its current service. The popularity of Beats audio accessories was also probably very attractive to the company. Beats by Dre headphones run from about $170 to up to $450.

Sources: Ars Technica

The Verge