After weeks of rumors and speculation, Apple has officially announced its acquisition of Beats Electronics. The $3 billion dollar deal also includes the appointment of Beats co-founders Dr. Dre and Jimmy Iovine to as-yet unspecified executive roles.
The deal is indicative of more than Apple’s power to cash in on a trend. According to Billboard, the press release by Apple and Beats lists Apple’s purchase of Beats Music (the new streaming service) before Beats Electronics (the well-established equipment side of the company). This syntactical decision indicates that Apple may be trying to make its move into the online streaming market, where it will compete against heavy-hitters Spotify and Pandora.
Interscope-Geffen-A&M chairman and Beats co-founder Jimmy Iovine spoke about the potential for this deal to ease the tension between the music production and distribution worlds. While streaming services like Spotify have garnered criticism from record labels as well as musicians themselves (see: Thom Yorke, Beck), Iovine suggested in a recent interview that Beats Music aims to “bridge those worlds, because we come from music but we’ve worked in software and hardware.”
This deal, which will officially close on September 30, is Apple’s biggest acquisition to date.