Apple has confirmed that it has acquired Beats Electronics for a total of $3 billion. This cost includes $2.6 billion in cash and an additional $400 million in stock options that will vest over time. This is supposed to be Apple’s biggest acquisition ever. Beats co-founders Jimmy Iovine and Dr. Dre (Andre Young) will join Apple, but their responsibilities has not been revealed yet.
“I’ve always known in my heart that Beats belonged with Apple,” said Iovine. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”
In an interview with The New York Times, Cook said that “they’re going to be coming up with ways of features that blow your mind and products you haven’t thought of yet, and seeing around the next corner to articulate the way to take music to an even higher level than it is now.”
Eddy Cue, Apple SVP, said that Beats will make Apple’s music offering even better by adding a subscription service to its existing Internet radio and online store offerings. To celebrate this acquisition, Beats Music has updated its iOS app by dropping the cost of an annual subscription to $100, down from $120 and extending the free trial to 14 days. Apart from this, Cook has confirmed that the streaming service will still be available to Android and Windows Phone after the deal goes through. The deal, which is awaiting regulatory approval, is expected to close in Apple’s fiscal fourth quarter, which ends in late September.