Apple-Beats Music Acquisition Confirmed, Dr. Dre A Billionaire
By Tanya Diente | May 29, 2014 12:48 PM EST
The leaf on the Apple symbol is tinted green at the Apple flagship store on 5th Ave in New York
Cupertino tech titan is already preparing to finalize the deal this week. According to GSM Arena, Apple and Beats Audio Electronics acquisition is now worth $3 billion which is lesser than the original reported amount of $3.2 billion. Apple will be paying $2.6 billion in cash while the remaining $400 million in stock, reports NYTimes. Weeks earlier a video went viral in media websites like Youtube (video below), showing a reportedly drunk Dr. Dre, Beats co-founder, making claims that he would be hip-hop's first billionaire. This led to assumptions that his claim jeopardized the amount of the acquisition.
However, Apple lowered their offer for the acquisition because of "due negligence," according to Cult of Mac. Apple took time to go through the financial reports of Beats Audio Electronics. It also checked on the business activities of "Beats Music," and learned that the number of subscribers to "Beats Music" streaming service is only at 111,000. While its competition "Spotify" has over 10 million paying subscribers and about 30 million free users. Apple does not have their own music streaming service and Beats Music might just be the platform they need.
Market analysts, according to CNet, report that Apple is after the Beats Audio technology and engineering to further enhance its audio products and audio technology. Apple also wants to maximize the Beats brand itself, which has great product and fashion appeal to most users. Most of Beats technology is heavily marketed as compatible with Apple products. This would make the technology assimilation somewhat streamlined. Other analysts also speculate that Apple is looking to capitalize on the connections that Beats co-founders Dr. Dre and Jimmy Iovine can provide in the music industry. According to NYTimes, Apple's chief executive Timothy D. Cook praised Dr. Dre and Jimmy Iovine for their talent and calling them "unique." He likens the Beats co-founders to a precise grain of sand on the beach that is very hard and rare to find. Dr. Dre and Iovine are expected to be present at Apple's WDC on June 2 to finalize the acquisition.
Apple has declined to share its plans for the products they will make with Beats, reports NYTimes. So it would take time to see how the acquisition turned out. Once the acquisition is complete, Dr. Dre will reportedly earn $750 million before taxes. Adding this amount to the $275 million he earned last year would still put him quite close to becoming a certified billionaire in net worth. So his drunken claim as being a billionaire on the viral video will be justified after all.
Source: Youtube/Zion Lion
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