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Apple Buying Beats For the Talent, Not the Tech

by Todd Haselton | May 23, 2014May 23, 2014 7:30 am PST

Jimmy Iovine Beats

Why is Apple buying Beats Electronics? We wagered our own guess earlier this month, suggesting that perhaps Beats Electronics will give Apple access to Android users through the company’s Beats Music streaming platform. Then, as more details spilled out, it seemed more likely that Apple wants to acquire Beats for the talent, like super-connected Jimmy Iovine. Now, a report from TechCrunch says that’s exactly the reason, but it’s not just for Jimmy.

“They want Jimmy and they want Dre,” TechCrunch’s source explained. “He’s got fashion and culture completely locked up.” It’s tough to argue, anywhere you look today you’ll find someone wearing Beats headphones, so clearly the two men know how to sell a product, but the $3.2 billion asking price is still a lot more than the company’s estimated $1 billion valuation.

TechCrunch surmises that Iovine will also help Apple secure any deals with record labels, particularly for expanding its iTunes offering, finally helping Apple get a streaming music service off the ground. Will it actually happen, though? The source speaking to TechCrunch said he or she is 70 percent certain it will, but that discussions almost deteriorated several times.

Some reports suggest we’ll see Iovine and Dr. Dre at WWDC in early June. If so, then we expect to hear public details at that time.

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Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...