Beats Music and Beats Electronics has been bought by Apple, but
what happens now? Some details have already started to surface following
a series of interviews with Dr. Dre, Jimmy Iovine, and Tim Cook on the
news, but while the dust settles, here's what we know, what is likely to
happen next, and what's probably out of the question.
What Dre, Iovine, and Cook have said so far
As part of the acquisition, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple. According to The Wall Street Journal, they will be simply known as "Jimmy and Dre" at Apple.
Iovine has said that he would leave his post as chairman of
Interscope Records and will work full-time at Apple presumably helping
them to further ink deals with the music and film studios.
Dr. Dre told The Wall Street Journal that he would continue to produce music but do "as much as it takes" for Apple.
We also know that Beats Music will still be available on Android and
Windows Phone after the deal, according to Tim Cook talking to the
FT - telling them "It’s all about music."
Furthermore, although the headline price tag is $3 billion, the deal
includes a $400 million vested amount, which, although not stated, is
likely to include targets and support from Iovine and Dr. Dre over the
next couple of years. That's good news for Apple, because it means that
the pair will still want to be heavily involved to make sure it is a
success and that they get that final $400 million.
Apple has told the
The New York Times that
"The Beats brand will remain separate from Apple’s, and Apple will
offer both Beats’s streaming music service and premium headphones."
The New York Times also states, Cook telling them, that "Mr. Cook
said that Dr. Dre and Mr. Iovine would be working with Apple on the next
generation of music offerings, but declined to share details about
future products." It added: "They’re going to be coming up with ways of
features that blow your mind," he said, "and products you haven’t
thought of yet, and seeing around the next corner to articulate the way
to take music to an even higher level than it is now."
What is likely to happen next
Apple has bought Beats for the headphones, because according to an
internal memo from Tim Cook, Apple's CEO to Apple staff on the
acquisition: "They are among the most popular and highest-rated
third-party products sold today in Apple’s retail and online stores."
It's bought the streaming music service which Cook also believes is
"the first subscription service to really get it right" and therefore
likely to continue to push that.
In an official statement, Eddy Cue, Apple’s senior vice president of Internet Software and Services, stated that:
"Music is such an important part of Apple’s DNA and always will be"
and that "the addition of Beats will make our music lineup even better,
from free streaming with iTunes Radio to a world-class subscription
service in Beats, and of course buying music from the iTunes Store as
customers have loved to do for years."
Expect Apple to start pushing both Beats headphones and the streaming music service to its customers in the near future.
What's probably a long shot
There are a number of guesses as to what is going to happen after the
deal, but some, whilst probably wanted, are unlikely to happen,
especially straight away.
Apple is unlikely to start bundling Beats headphones with every
purchase of an iPhone, iPad, or iPod. It makes good money from its cases
division, and from what it has said about how well Beats headphones
sell, it is unlikely to suddenly start giving them away for free.
We could see Beats Audio technology worked into future Apple products
in the same way we saw that with HP laptops and HTC phones in the past,
but we don't believe it will happen immediately and certainly unlikely
in the 2014 models - iPhone 6 and iPad 5. Never say never of course, but
we suspect it will be too soon even for Apple.
Beats music is unlikely to be folded into iTunes either. Apple has
bought the company because of the people (Dre, Iovine, and the team are
moving to Apple) but also because of the strong Beats brand. Now it also
has a strong music subscription service and a strong music-buying
service.
