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Music firm in Apple’s sights

May 9: Apple is in discussions to buy Beats Electronics, the company behind the popular Beats by Dr Dre headphones, for $3.2 billion, according to people briefed on the talks, in what would be the biggest acquisition in Apple’s history.

The deal would also include the new Beats Music streaming service, which was introduced in January as a competitor to Spotify and Pandora, and could signal an effort by Apple to transform its approach to music more than a decade after it opened the iTunes download store.

A deal has not been consummated, and the negotiations could still fall apart, according to these people, who declined to be identified speaking about it publicly. But if it is completed, the sale could be announced as early as next week, the people said.

For Apple, whose revenue growth has slowed sharply in the last few years, the deal could point to a headlong move into the frontier of streaming music.

The company, which only last year released its streaming product, iTunes Radio, has been slow to enter the streaming world.

A purchase of Beats would also give Apple a hot product and an even hotter brand, founded by the rapper Dr. Dre and the music executive Jimmy Iovine. After its enormous successes with the iPhone and iPad, Apple has been under intense pressure from investors to unveil new products, but none have yet been released.

At over $3 billion, the Beats acquisition would be a major departure for Apple, which under Steven P. Jobs, its co-founder, favoured smaller deals. However, Timothy D. Cook, who took over as chief executive of the company shortly before Jobs died in 2011, has been vocal about the company’s acquisitions and the strategy behind them.

Beats began to sell its sleek, bass-heavy headphones in 2008 as an alternative to the lightweight earbuds that Apple included free with its iPod players.

 
 
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