Apple Buys Beats for Brand Power

• Apple is paying $3B to buy the high-end headphone vendor/streaming music provider - $2.6B up-front + $400M that will "vest over time."
• The deal is expected to close in FQ4. 
• Jimmy Iovine and Dr. Dre will be joining Apple, but their specific roles haven't yet been disclosed. Iovine is stepping down as chairman/CEO of music label Interscope Geffen A&M.Apple will continue using the Beats brand, and states Beats' products will now be "offered in many more countries through the Apple Online Store, Apples retail stores and select Apple Authorized Resellers."More on Apple/Beats
• Tim Cook on Beats Music: "We love the subscription service that they built—we think it's the first one that really got it right."

WSJ is reporting Apple Inc. said on Wednesday it is buying Beats Electronics LLC for $3 billion to bolster a music business that has lost some of its mojo, as streaming-music services encroached on the downloads dominated by Apple's iTunes service.

In Beats, Apple is getting a music-streaming service, high-end headphones and music-industry connections. Beats' co-founders, rap star Dr. Dre and music mogul Jimmy Iovine, will join Apple.


The deal will make Apple "cool" again by uniting Mr. Iovine's feel for "the culture of young people" with Apple's "many millions of young peoples' credit cards," said Sony Music Entertainment Chief Executive Doug Morris, who, as the former chief executive of Universal Music, was Mr. Iovine's boss when he carved out a sideline running Beats Electronics. "Apple was starting to lose their edge," Mr. Morris said.

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