If the numbers bandied about are true, the $3.2 billion to buy rap mogul Dr. Dre's headphone and music-streaming service would be the iPhone maker's largest-ever purchase by the iPhone maker. The deal would include the streaming Beats Music subscription service and the headphone and speaker division.
Over the years, Beats has become a tremendously influential and popular brand thanks to Dr. Dre and co-founder, music producer Jimmy Iovine to strategically market the company's signature headphones, Beats by Dre.
- Apple is doing it to get control of the headphone space and the coolness of the brand.
- Beats's fledgling music subscription service.
- It's a great deal because Beats hardware is very profitable and has, in some cases, much higher profit margins than Apple products.
If Samsung were to buy Beats, Apple would have to launch a full scale hardware battle against the Beats brand with its own product. This would have included substantial manufacturing, marketing and R&D costs at a time where the company needs to be focused on more strategic decisions. So will Apple buy Beats, or will it get beat by Samsung? At the time of publication the author had no position in any of the stocks mentioned. This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff. >>Read more: Now We Learn Why Facebook Acquired Oculus