After much speculation, Apple today confirmed that it has acquired Beats Electronics.
Cupertino will pay $3 billion for Beats Electronics and its Beats Music streaming-music service, making it Apple's largest acquisition to date. The purchase price is $2.6 billion, plus $400 million that will vest over time. As part of the deal, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple.
"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," Tim Cook, Apple's CEO, 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."
"I've always known in my heart that Beats belonged with Apple," said Jimmy Iovine. "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."
Eddy Cue, Apple's senior vice president of Internet Software and Services, said the Beats deal "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 fans have long called for a streaming-music service from Cupertino. Hopes were buoyed when Apple bought Lala in 2009, but thus far, all we got was iTunes Radio within iOS 7, while many were hoping for a more Spotify-esque solution.
In PCMag's review of Beats Music for iPhone, we found that it "has several well-curated playlists, but a few gimmicky features and a questionable user-interface sullies the experience a bit."
In an interview with Re/code, Cook said Apple opted to buy Beats rather than create its own streaming-music service because "Beats provides us is a head start." According to Cook, "we get a subscription music service that we believe is the first subscription service that really got it right."
Reports about an Apple-Beats deal emerged earlier this month. In recent days, there was speculation that the deal had crumbled and that Apple had reduced its offer price, but it looks like Cupertino felt that Beats is worth the $3 billion.
The announcement comes as Iovine and Ian Rogers, the CEO of Beats Music, are set to take the stage at the Code Conference in California. Apple's Cue and Craig Federighi, senior vice president of software engineering, will appear later this evening.
For more, see Apple Is Buying Beats to Go After Spotify, as well as 5 Reasons Why Apple Shouldn't Buy Beats, and 5 Reasons Why It Should.