The deal sees Apple take control of all of Beats’ operations, including its Beats Music streaming music service, and Beats Electronics. While the purchase of the headphones and speakers division is a useful purchase, Apple seems more focused on the streaming side.
Tim Cook told Re/code’s Peter Kafka that he believes that Beats Music “is the first subscription service that really got it right.” He added, “The thing that Beats provides us is a head start. They provide us with incredible people, that don’t grow on trees.”
$2.6 billion of the total amount is to be paid up front with $400 million to come at a later date. The deal must first pass regulatory approval and could close sometime in Q4 this year.
Jimmy Iovine is to part ways with Interscope Records to work full time with Apple, while Dr. Dre is to continue producing music and do “as much as it takes” for Apple.