Apple Gets Beats - And Their Man - For $3 Billion

Electronics giant Apple has confirmed the acquisition of music streaming service Beats Music and headphones and hardware manufacturer Beats Electronics for US$3 billion.

As part of the deal Beats co-founders Jimmy Iovine and Dr. Dre will join Apple's ranks, with Iovine in particular set to re-inject Apple's music strategy with a creative flair perceived missing since the passing of former CEO Steve Jobs. Industry experts have speculated that the capture of Iovine was just as vital to the deal as owning an on-demand streaming service (Apple already have streaming radio platform iTunes Radio) or headphone sales.

“I've always known in my heart that Beats belonged with Apple,” Iovine said today. “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.”

As part of joining Apple Iovine will leave his post at the Universal Music Group, where he ran the Interscope Geffen A&M labels division. John Janick, who joined universal in 2012, has been announced as his successor at Interscope Geffem A&M.

Apple expect the deal, it's largest ever and which involves a US$2.6 billion purchase price and US$400 million in stock, to be finalised in the final quarter of 2014. The brands will remain separate and iTunes Radio will continue to be offered alongside Beats Music, although expect Apple to integrate the technologies into future products.

Eddy Cue, Apple's Senior Vice President of Internet Software and Services, who Dre and Iovine will work under, said, “Music is such an important part of Apple's DNA and always will be.

“The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years.”

Beats Music purchased the MOG music streaming platform, still available in Australia, in 2012 and plans to shut it down and replace it with Beats Music imminently.

Article updated 3pm