Dr Dre becomes a Billionaire as Apple acquire Dre Beats at $3B.

Rap is coming to Cupertino in a big way. After weeks of rumor, Apple finally announced it has acquired headphone maker Beats Electronic
for $3 billion, including $2.6 billion cash up
front and approximately $400 million in stock
that will vest over time. As part of the deal, Beats
co-founders Dr. Dre and Jimmy Iovine will join Apple in undisclosed roles. “Music is such an important part of all of our
lives and holds a special place within our hearts
at Apple,” CEO Tim Cook said in a statement.
“That’s why we have kept investing in music and
are bringing together these extraordinary teams
so we can continue to create the most innovative music products and services in the world.” This acquisition is Apple’s biggest ever, and
largest since it brought back Steve Jobs in 1997 though a $400 million purchase of NeXT.
However, the $3 billion price is still just 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. “I’ve always known in my heart that Beats
belonged with Apple,” Iovine said. “The idea
when we started the company was inspired by
Apple’s unmatched ability to marry culture and
technology. Apple’s deep commitment to music
fans, artists, songwriters and the music industry is something special.” The $3 billion purchase price includes Beats
Music, the sister company that runs a
subscription streaming music service. In fact,
Apple’s press release mentioned that before the
more well-known headphone business. While
some analysts have wondered why Apple doesn’t simply build its own streaming service within
iTunes, Cook must believe this deal gives him a
quicker way to catch up with Spotify and others. “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,” Apple Senior Vice President Eddy Cue said. Apple shares fell slightly on Wednesday in
trading before the announcement, but remain
up over 17% since April 23rd. Shares have
crested $624, the highest mark Apple has traded at since October 2012.