It was the hottest tech and business rumour just two weeks ago before it lost steam as Apple delayed in confirming the very credible rumours. That has just happened and it is now official that indeed Cupertino has moved in to acquire Beats Electronics for a total sum of $3 billion.
Apple is paying $2.6 billion in cash and the remainder in stock options with official closure of the deal expected to happen before the end of this year when all the paper work and regulatory approvals are in place. The acquisition now places Apple at the sweet spot of being in charge of a hippy and flashy set of headphones that have come to symbolize much of what is known of Beats the company to the general public and are very much the face of headphones in the music industry and loved by young people all over the world. Of course as was widely believed, Apple’s main interest in the company it has now bought was not driven by the hardware but rather the streaming service, Beats Music, which is expected to give Apple an edge going forward as its iTunes music subscription business struggles in the wake of increased competition from the likes of Pandora, Spotify and others that have grown over time.
Beats will still continue operating independently even though its co-founders, music executive Jimmy Iovine and rapper and music producer Dr Dre will be directly reporting to Apple’s head of Internet services Eddy Cue. Apple has so far confirmed that it has no plans of shutting down iTunes Music so for now Beats Music and iTunes Music will co-exist and continue serving their respective users. Thanks to its new owners, Beats headphones will now be available for sale in the Apple Online Store and Apple’s retail stores and of course in places like Kenya where we lack these, authorized Apple Authorized resellers.