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Apple Still Buying Beats? Yep, It’s an Acquihire



Apple Still Buying Beats? Yep, It's an Acquihire

The California-based iPhone, iPad and Mac maker isn't after tech — Beats doesn't have any — but rather wants to acquihire founders Jimmy Iovine and Dr Dre

While I’m not a believer, yet, sources say Apple’s Beats acquisition is still happening. Moreover, the Cupertino, California-based iPhone, iPad and Mac maker isn’t after technology — Beats doesn’t have any — but rather wants to acquihire founders Jimmy Iovine and Dr Dre.

Tapscape was among the first to break the Apple buying Beats story line. However, two weeks and counting after the deal “was supposed” to have closed, nothing has happened.

Nevertheless, TechCrunch has doubled if not tripled down on the idea that Apple will buy Beats. Moreover, as widely speculated, the deal is all about the people.

“They want Jimmy and they want Dre,” said well connected yet unidentified source. “He’s got fashion and culture completely locked up.”

While Apple is said predominantly interested in cofounders Jimmy Iovine and Andre Romelle Young (aka Dr Dre), Beats was valued at $1 billion last year and is thought to have sale of roughly $1 billion, as well.

So, although the personalities might ultimately not work out, the Beats brand almost certainly will return the purchase price in short order — Apple is expected to pay $3.2 billion for the headphone maker.

Beats Music: The Real Deal?

That said, some music industry observers believe Apple is most interested in acquiring the Beats Music streaming service, which launched in January of this year. It’s thought that Beats plus Apple could deliver over the top market penetration and subscriber conversion.

But, but, but really?

Beats is thought to have only 100,000 paying customers. Spotify and Pandora, each of which has 10 million plus subscribers, lose money on every listener.

In fact, Spotify and Pandora together posted losses of more than $100 million for 2012, the last year for which both companies have reported.

Could Apple “Beats” Spotify and Pandora and squeeze a profit from the music streaming turnip? Something tells me this isn’t a trick question.

Music streaming has been a money loser for years and, by all reasonable accounts, will continue to be a money loser well into the future.

So, is Apple buying Beats? Maybe for Dre and Iovine, but Beats as a property is definitely problematic…

What’s your take?

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