So it did come as a surprise when Financial Times announced that the deal between Apple and Beats Electronics had been finalized and at a whopping sum of $3.2 billion, this marks the biggest and the most expensive deal that Apple has ever made. This “high quality” headphones maker founded by music producer Jimmy Iovine and hip-hop artist Dr. Dre has now become part of Apple and Dr. Dre and Iovine have joined Apple as the company’s executives.
Now everyone has been wondering why exactly would Apple be interested in Beats? It is pretty simple. With all the growing popularity of the streaming music services like Spotify, Pandora and Rdio, Apple realized that now was the perfect time to recharge its ‘cool’ factor. Though the iTunes service had been doing quite well for a very long time and no doubt it dominated the music world for a long time but eventually Apple had to evolve in one way or the other. And also, Apple’s flagship music brand iTunes has been criticized over its user interface and so this makes sense why Apple would want some outside help.
With $150 billion in cash and investments, this $3.2 billion deal was nothing that Apple couldn’t afford though it is thrice as large as any other deal that Apple has ever done. However, we aren’t really sure whether Steve Jobs would have made the decision or not because he was always proud of Apple’s ability to build everything from within the company.
“I knew people were going to dig it, but I didn’t know it was going to be this big,” Dre told TIME in a recent interview. “I didn’t know it was going to be at this magnitude. I know that people really care about the way their music sounds. So did I know it was going to work? Yeah, but I had no idea it was going to be this massive.”