An apple a day can't keep the doctor away because Apple is officially buying Beats by Dr. Dre.
"Apple will pay $3 billion for the headphone and music streaming company, most of that in cash. Apple is trying to reinvigorate its iTunes music app as people stop buying albums and single recordings." (Via CNBC)
Fox Business explains Apple might have negotiated a lower price because Beats' streaming service might not be as lucrative as previously thought.
"Spotify, the industry leader, they've got 40 million users, 30 million of them are using free, 10 million are paid, versus Beats they only have 100,000 right now."
Regardless, Apple is definitely not strapped for cash. Forbes reports the sale is "a tiny fraction of the company’s $150 billion cash reserves, and Beats’ estimated annual sales of $2 billion represents barely over 1% of Apple’s $171 billion revenue last year."
Apple CEO Tim Cook told Re/code the deal is about more than money.
"Music’s always been at the heart of Apple. It’s deep in our DNA."
KCAL says Beats' founders, renown music producer Jimmy Iovine and rap mogul Dr. Dre, will soon be part of the Apple team.
"Both now will become executives in Apple's music division. This is Apple's most expensive acquisition in its 38-year history."
Despite the sale, Apple will still keep the Beats brand as its own entity within the company.