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Beats Co-Founder to Join Apple as Part of $3.2B Buyout

by Jacob Kleinman | May 9, 2014May 9, 2014 7:30 am PST

Jimmy Iovine Beats

The real reason Apple is set to spend $3.2 billion acquiring Beats Electronics may not be about the company’s line of popular overpriced headphones or even its nascent music streaming service. Instead the acquisition may be all about bringing Beats co-founder Jimmy Iovine to Cupertino where he would help run Apple’s music division, according to sources speaking to both The New York Post and BuzzFeed.

According to sources with knowledge of to the deal, Iovine would initially take on the role of “special adviser” to Apple CEO Time Cook. The Beats co-founder and music engineer turned music mogul currently serves as chairman of Universal Music Group. His contract it set to run out by the end of 2014, offering the opportunity to take on a full-time role at Apple.

Apple is still a leading force in the music industry, but its iTunes Store business model has grown increasingly stale as music fans opt for free or subscription-based online streaming services like Spotify, Rdio and Beats Music. The company’s attempts to catch up with products like iTunes Radio and iTunes Match haven’t been able to gain much traction. Meanwhile, Iovine has proven himself to be marketing whiz with the potential to drag Apple into the era of cloud-based music once and for all.

On its own, paying $3.2 billion just to hire the music executive still doesn’t make a whole lot of sense, but coupled with the company’s profitable headphones business and its recent push into music streaming the deal starts to come together. Apple is acquiring three things at once, and all three of them have the potential to be a perfect fit.

NYPost BuzzFeed

Jacob Kleinman

Jacob Kleinman has been working as a journalist online and in print since he arrived at Wesleyan University in 2007. After graduating, he took a...