Tuesday, 27 May 2014
Apple is reportedly negotiating the purchase of Beats for $3.2 billion, according to a new report from The Financial Times. The deal would include both the streaming Beats Music subscription service, as well as the part of the company that produces headphones and speakers. The move, which would be Apple's largest acquisition ever, could be announced as soon as next week, the paper says. Citing sources, Bloomberg, The Wall Street Journal, and Recode also confirmed that the deal was nearing completion.
Apple already sells Beats products in its retail stores, and just last month Beats began offering a way to subscribe to its streaming music service
using Apple's in-app purchase, something that gives Apple a cut of its
subscription revenue. That service competes with Apple's iTunes Radio in
part by offering playlists curated by celebrities and musicians,
however Beats requires a paid plan that gives users full access to that
entire streaming music catalog. In recent months, Apple has said to be developing its own similar service, possibly for use on Android devices, that would augment its own free service.
The music aspect of the deal would come amid declining album and individual track sales,
which according to Nielsen SoundScan, were were down 13 and 11 percent
respectively in the US for the first eight weeks of the year. Apple's
own streaming service iTunes Radio only came out about eight months ago with iOS 7.
Apple's used it to push people to buy full versions of the songs from
iTunes, though the service has been limited to the US, and only recently Australia.
