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article imageApple poised to buy designer audio company Beats

By James Walker     May 9, 2014 in Technology
Apple is purportedly considering buying the highly-popular fashionable audio company Beats for around $3.2 billion (£1.9 billion) which would make the deal the most costly acquisition Apple has ever made.
Beats Audio, often branded and advertised as 'Beats by Dr. Dre' — the popular hip-hop star who helped to found the business with music producer Jimmy Iovine — has seen huge successes in recent years and has proved to be especially popular with the younger, fashion and style conscious generations in our society.
Although the company is only valued at around $1 billion, Apple has offered over three times that amount to acquire the divisions of the company dealing with audio equipment, streaming music and, of course, the popular headphone brand.
Apple wants the company to enable it to compete more against Spotify and Xbox Music in the subscription-based streaming music industry having previously faced poor usage figures for Apple Radio since launch last year. Although it is not initially clear about whether Apple will replace their white earbuds that are bundled with their products should the closure of the deal be successful, it does look to be a likely proposition owing to the almost universally critical reviews of their own-brand product.
Beats is currently owned primarily by investment firm Carlyle since September of last year as they paid nearly $500 million to fuel Beats' development. Previous sponsor and investor HTC sold their 25 percent stake last year as sales of their Beats Audio-equipped smartphones fell.
Although Apple has bought over 20 companies in the past 18 months not many of them have been especially costly or have attracted public attention as much as Google and Facebook's recent acquisitions have. Perhaps this is the start of Apple beginning to buy more larger, high-investment companies to keep its earnings level with Google and Facebook. If so, they certainly have the money to spend on companies as it is estimated they have over $133 billion excess to spend on companies if they wish to.
More about Apple, Beats, Audio, Headphones, Acquisition
 
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