Apple confirmed the frenzy of speculation around its rumored acquisition of Beats today when it announced plans to buy the company for $3 billion. But why is it making the move?
Eddy Cue, Apple’s executive in charge of its iTunes business, told the audience at Recode’s Code conference that there are three primary reasons behind this “no-brainer” deal: the talent at Beats, the quality of its headphones, and the Beats Music streaming service.
But Apple already makes hardware and offers music services — so couldn’t it create these products by itself?
“We don’t do everything,” Cue told Recode founders Walt Mossberg and Kara Swisher. “We try to do a few things. We think Beats’ talent can accelerate us. This isn’t something that just happened over night. Jimmy and I have talked about working together for a decade.”
Beats co-founder Jimmy Iovine echoed those comments, explaining that there’s a shared understanding between the two companies.
Despite the cultural fit, Iovine and his team aren’t relocating to Apple HQ – the famed music producers says he will visit Cupertino around 10 times a year. He and his Beats partner Dr Dre will report to Cue for the music side of the business, and Apple marketing chief Phil Schiller on product.
Neither executive would be drawn into talking about future products and plans but they did hint that Beats products could be sold to Apple customers as “upgrades” that provide a superior music experience to Apple’s earbuds — which Iovine joked are for checking that a product is switched on.
While Apple’s interest in the streaming service is more obvious, those comments hint that Beats products may become optimized or come recommended for Apple products in the future.
Image via Recode