Apple has purchased Beats Electronics, the headphone maker and music streaming distributor founded b
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(28 May 2014) FOR CLEAN VERSION SEE STORY NUMBER: apus011196
Apple is striking a new chord with a $3 billion acquisition of Beats Electronics, a headphone and music streaming specialist that also brings the swagger of rapper Dr. Dre and recording impresario Jimmy Iovine.
Wednesday's announcement comes nearly three weeks after deal negotiations were leaked to the media. It's by far the most expensive acquisition in Apple's 38-year history, a price that the company is paying to counter a threat posed to its iTunes store.
The price consists of $2.6 billion in cash and $400 million in Apple stock that will vest over an unspecified time period. The deal is expected to close before the end of September.
But not everyone thinks the Beats acquisition will help Apple's popularity. Erich Joachimsthaler is the Founder and CEO of Vivaldi Partners Group. He says "Apple has its share of challenges, let's say, from a branding perspective" but he goes on to say that this move may not help the company regain that 'cool factor.'
With $1.1 billion in revenue last year, Beats is already making money and will boost Apple's earnings once the new fiscal year begins in October.
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