After weeks of speculation and the leaking of the purchase agreement, Apple has officially announced the purchase of Beats Audio, which includes the sound hardware division and the Beats Music streaming service. Both parts of the business will continue to function as they currently are, with no immediate changes to structure. The purchase also sees Beats heads Jimmy Iovine and Andre Young (nee Dr. Dre) become full-time Apple employees as of the close of the transaction, which is expected in the fourth quarter of the year.
The purchase of Beats follows months of speculation on Apple’s plans for the future of iTunes, as its own iTunes Radio streaming service competes directly with the human-curated Beats Music service and many observers expected Apple to build its own subscription service akin to Spotify, while Beats Electronics weathered a tumultuous 28 months through its previous partnership with HTC which saw it ultimately re-purchase the stake formerly owned by the Taiwanese smartphone manufacturer after months of mounting losses and less enthusiasm overall for the partnership that gave rise to built-in amplifiers in select HTC smartphones and prominent Beats Audio branding on same.
Finally, in its ever present memo to employees, Apple CEO Tim Cook has confirmed the Young and Iovine will report to Eddy Cue as full Apple employees, though the details on their exact roles in the company once the purchase is complete have yet to be determined.