Tech giant Apple will acquire music service Beats Music and Beats Electronics for $3 billion, a move aimed at strengthening its music services portfolio. Speculation about the deal started earlier this month with the size estimated at $3.2 billion says Sachin Karpe.
The deal with Beats also marks a departure for Apple, which has a reputation for developing new products rather than buying up smaller firms - a method preferred by rivals Google. Beats co-founder Jimmy Lovine, who made his name as chairman of the Interscope Geffen A&M record label, welcomed the deal and told that he believed that Beats always belonged to Apple. Adding Beats will give Apple fresh star power in music and the ability to get more ad revenues from streaming including mobile. Mobile music revenues in the US totaled $1.68 billion in 2013, according to the research firm eMarketer, which estimates that figure will increase to $2.52 billion this year.
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