Apple Inc. (NASDAQ:AAPL)’s acquisition of Beats won’t likely close until next week. The Cupertino-based tech giant is planning to buy up Dr. Dre’s music streaming service for $3.2 billion in hopes of boosting iTunes.
Re/Code’s Peter Kafka explained, “That’s a longer timetable than some people expected as recently as a few days ago.”
Apple’s strange deal with Beats
Perhaps the most interesting thing about this report is that it is a strange move on Apple’s behalf. The company wants to pay a relatively low price for a streaming music service, headphone business and talented executives. The iPhone maker already launched something similar with iTunes Radio last year. This free radio service is available on iOS 7 and iTunes. This radio was initially designed to compete directly against Pandora Radio service, but the Beats acquisition will allow Apple to do more.
Apple Inc. (NASDAQ:AAPL) and Beats are two distinctly different companies, so it will be interesting to see if and how the companies will collaborate. Apple Inc. (NASDAQ:AAPL) is a part of the Silicon Valley culture. The company is also a haven for engineers, coders and designers. It is a company that takes pride in solid design and high-end products. Beats is more of a celebrity-oriented company. Given the fact it is owned by hip hop legend Dr. Dre and music mogul Jimmy Iovine, it is not surprising that the company frequently throws lavish parties.
Jobs and Iovine’s connection
Manatt Digitial Media Ventures CEO Peter Csathy thinks both companies have something important in common. He explained how Iovine was a friend of the late Apple Inc. (NASDAQ:AAPL) co-founder Steve Jobs. He elaborated, “These aren’t strange bedfellows at all. Steve Jobs really drove the relationship with the music industry. The executives at Apple and Beats know each other very well, and there’s a comfort level there.”
Apple Inc. (NASDAQ:AAPL) first launchedthe iTunes music download service over a decade ago, but other than the radio service, not much else has changed. Hopefully, Beats will be able to give iTunes a much-needed boost.