Hip Hop legend and Rap mogul, Dr Dre and his business partner, Jimmy Iovine, have inked a $3 billion deal to sell Beats Electronics, which makes the
wildy popular Beats by Dr. Dre
headphones, to Apple Inc. Dre, 49,
and Iovine, 61, are getting $2.6 billion
in cash, $400 million in Apple stock, and big time jobs with the company.
“We’ve known these
guys forever,” said Apple honcho Tim Cook. “We’ve dated, we’ve gone steady and now we’re getting married.” Cook
called it an “incredible cultural fit.”
“These two guys have a
very rare set of skills,” he said. “It’s like finding a particular grain of
sand on the beach. It’s that rare.”
The Apple chief didn’t specify what exactly the good doctor
and the legendary music producer would be doing for Apple, but he said the
Beats’ music streaming service was the main selling point.
This will allow Apple, the world’s biggest seller of tunes,
to compete in the lucrative Internet-based streaming business currently
dominated by YouTube, Pandora and Spotify.
“Apple might just be
paying a reasonable price for a fast-growing company,” said industry expert
Brian Colello, an equity analyst at
Morningstar. “They also bring in talented
music executives and they might be able to do very interesting things with
Beats.”
A match made in music industry heaven: Beats headphones and
an Mac laptop. The electronics will become siblings now that Beats Electronics
has been sold to Apple.
Another industry analyst, Tom Forte of the Telsey
Advisory Group, said Apple was also likely to make a bundle on the
headphones, which sell for up to $450 a pair and are already a big hit with the
kids.
“The company has a
history in music and an infrastructure with its retail stores and its websites
to sell a lot of music accessories,” Forte told the Daily News.
This is the most expensive acquisition in Apple’s 38-year
history. But it’s about $200 million less than what had been expected when word
first leaked out three weeks ago that the iPhone maker was after Beats
Electronics.
Dre, a self-made success straight out of the gritty Los
Angeles suburb of Compton who helped turn other rappers like Eminem and 50 Cent into stars, all but
confirmed that he was on the verge of becoming the rap world’s first
billionaire in a NSFW video that appeared of R&B singer Tyrese Gibson’s Facebook page.
"First
billionaire in hip-hop, right here on the motherf-----g West Coast,"
Dre is heard saying. In the video, they drink Heineken. Now they can afford to
bathe in Cristal
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