Fruity inventor of the rounded rectangle, Apple, has just written a $3 billion cheque to buy the music outfit Beats.
The company will bring recording mogul Jimmy Iovine and rapper Dr. Dre into Apple into the cargo cult as part of the acquisition of the music streaming and audio equipment company.
Apple is treated with suspicion in the music industry and it is thought that Iovine and Dre might help that . Jobs’ Mob wants to do more on subscription services, a market expected to eclipse song downloads in the long run.
Iovine’s music industry relationships could make the notoriously difficult licensing negotiations for a future streaming service more likely.
It is the biggest deal that Apple has signed, normally Apple buys companies worth hundreds of millions of dollars rather than billions, and Beats does not have that many customers. But iTunes sales are falling and Pandora and Spotify are giving it a good kicking.
Apple is also gaining a line of high-end headphones popular with a young urban demographic, bumping up its “cool” factor. But industry executives say the company was most impressed with Beats’ five month-old music service.
The best part of the deal as far as Apple is concerned though is getting hold of Iovine who is best known as the co-founder of Interscope Records, a rap music pioneer that branched out to include acts like Lady Gaga and U2.