Recently, Apple Inc. acquired Beats Electronics for $3 billion. The deal gave Beats Electronics, which is owned by Dr. Dre and Jimmy Lovine, $400 million in Apple equity and the rest in cash. The deal also put Dre and Lovine as top-end Apple employees. Dr. Dre will be working with Apple both in the hardware and music divisions. The recent purchase of Beats Electronics by Apple Inc. is rare, but not unprecedented. Speculations about the recent merger have all pointed towards Apple attempting to start a streaming music service like that of Spotify or Pandora. This is because sales in the iTunes Store have been declining in recent years due to people opting in for streaming music services over purchasing music directly. In January, Beats Electronics launched a streaming music service of their own, which has had debated success, but is speculated to be the main reason that Beats Electronics was purchased. Apple has been trying to get their own streaming music service off the ground, iTunes Radio, but has had limited success. Apple arguably has some of the greatest minds in audio working for them including: Tomlinson Holman, who is the inventor of THX Theater Audio. Now, the quality of Beats headphones is extremely debatable, but their popularity is not. But in the end, the Beats headphones quality does not matter because Dr. Dre has a lock down on what culture wants. As far as Beats Music is concerned, there is speculation that Dre and Lovine only launched the streaming music service to prove its success, so that Apple would purchase Beats Electronics. Whatever the speculation is behind the purchase, one thing that cannot be argued is that the purchase has been good for Apple stockholders, which can be seen in the sharp increase in stock prices in the month following the merger.
