Apple's Acquisition of Beats Met with Skepticism, but Jimmy Iovine May Be Key

Since the Financial Times broke the news yesterday, numerous publications are now claiming Apple is in the final stages of acquiring Beats Electronics, a headphone company and streaming music service created by hip hop star Dr. Dre and music industry veteran Jimmy Iovine. The response to the news is mixed, with some experts offering compelling reasons for the deal and other pundits questioning Apple's rationale in pursuing what would be its biggest acquisition to date.

Iovine has strong ties to the music industry and a long history of working with Apple, having met with Steve Jobs to discuss a subscription music service in 2003 and more recently in talks with Apple's Tim Cook and Eddy Cue about the Beats Music service before it launched earlier this year. In a recent interview with The Wall Street Journal, Iovine credits Apple as his inspiration for the idea of the Beats brand.

"The idea of Beats...to be very frank, I got from Apple," he said, noting the "uniqueness of their blending of technology with popular culture."

If the acquisition proceeds, Iovine may join Apple as a "special adviser" to Tim Cook on creative matters. Iovine would bring to Apple his knowledge of the music business as evidenced in a AllThingsD interview from last year embedded below, and his insider influence that Wall Street Journal sources predict could be used to boost advertising on Apple's existing iTunes Radio.


Apple also would acquire Beats' successful consumer electronics business selling high-margin headphones and its newly launched music streaming service. Apple could bring the Beats hardware brand under the guidance of Jony Ive and use it to create new music product lines and add new channels to sell Apple's products, suggests Re/code. The Beats music service is likely a longer-term investment, allowing Apple to accelerate any plans to offer a streaming music service for its iTunes customers, which number in the hundreds of millions.

Analysts, however, are meeting the news of the high-priced acquisition with both contempt and confusion, noting that such an acquisition is out of character for the Cupertino company. One of the first to weigh in on the deal was Gene Munster, who called the acquisition a "bad idea" in an investor note.

We are struggling to see the rationale behind this move. Beats would of course bring a world class brand in music to Apple, but Apple already has a world class brand and has never acquired a brand for a brand's sake (i.e., there are no non-Apple sub-brands under the company umbrella). Separately, we are not aware of any intellectual property within Beats that would drive the acquisition justification beyond the brand.

Apple pundit John Gruber of Daring Fireball was equally skeptical of the deal, saying "I don’t get it."

On the surface, this doesn’t make any sense to me. I can’t see Apple keeping the “Beats” brand around for headphones. If Apple wanted to sell expensive high-end headphones, they don’t need to spend $3 billion. The Beats streaming service is interesting, but can’t Apple do that on its own, as an expansion of the iTunes Music Store and iTunes Radio?

According to the original Financial Times report, Apple's acquisition of Beats could be announced as soon as next week. Negotiations are still ongoing with some final details yet to be ironed out, allowing for the possibility that "talks could still fall apart."

Popular Stories

iphone 16 pro models 1

Here's How the iPhone 17 Pro Max Will Compare to the iPhone 17 Pro

Saturday July 5, 2025 1:00 pm PDT by
Apple should unveil the iPhone 17 series in September, and there might be one bigger difference between the Pro and Pro Max models this year. As always, the Pro Max model will be larger than the Pro model:iPhone 17 Pro: 6.3-inch display iPhone 17 Pro Max: 6.9-inch displayGiven the Pro Max is physically larger than the Pro, it has more internal space, allowing for a larger battery and...
imac video apple feature

Apple Launching These 15+ Products Later This Year

Sunday July 6, 2025 8:05 am PDT by
The calendar has turned to July, meaning that 2025 is now more than half over. And while the summer months are often quiet for Apple, the company still has more than a dozen products coming later this year, according to rumors. Below, we have outlined at least 15 new Apple products that are expected to launch later this year, along with key rumored features for each. iPhone 17 Series iPho...
iPhone 17 Pro in Hand Feature Lowgo

iPhone 17 Pro to Reverse iPhone X Design Decision

Monday July 7, 2025 9:46 am PDT by
Since the iPhone X in 2017, all of Apple's highest-end iPhone models have featured either stainless steel or titanium frames, but it has now been rumored that this design decision will be coming to an end with the iPhone 17 Pro models later this year. In a post on Chinese social media platform Weibo today, the account Instant Digital said that the iPhone 17 Pro models will have an aluminum...
iPhone Car Key Kia

Here's Which Vehicles Offer iPhone Car Keys

Sunday July 6, 2025 3:03 pm PDT by
In 2020, Apple added a digital car key feature to its Wallet app, allowing users to lock, unlock, and start a compatible vehicle with an iPhone or Apple Watch. The feature is currently offered by select automakers, including Audi, BMW, Hyundai, Kia, Genesis, Mercedes-Benz, Volvo, and a handful of others, and it is set to expand further. Apple has a web page with a list of vehicle models that ...
iOS 26 Feature

Everything New in iOS 26 Beta 3

Monday July 7, 2025 1:20 pm PDT by
Apple is continuing to refine and update iOS 26, and beta three features smaller changes than we saw in beta 2, plus further tweaks to the Liquid Glass design. Apple is gearing up for the next phase of beta testing, and the company has promised that a public beta is set to come out in July. Transparency In some apps like Apple Music, Podcasts, and the App Store, Apple has toned down the...
iPhone 17 Pro in Hand Feature Lowgo

iPhone 17 Pro Coming Soon With These 14 New Features

Friday July 4, 2025 1:05 pm PDT by
Apple's next-generation iPhone 17 Pro and iPhone 17 Pro Max are just over two months away, and there are plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models. Latest Rumors These rumors surfaced in June and July:Apple logo repositioned: Apple's logo may have a lower position on the back of the iPhone 17 Pro models, compared to previous...
iphone 17 pro render majin bu

New iPhone 17 Pro Renders Highlight Apple Logo and MagSafe Design Changes

Sunday July 6, 2025 8:43 pm PDT by
New renders today provide the best look yet relocated Apple logo and redesigned MagSafe magnet array of the iPhone 17 Pro and iPhone 17 Pro Max. Image via Majin Bu. Several of the design changes coming to the iPhone 17 Pro model have been rumored for some time, such as the elongated camera bump that spans the full width of the device, with the LiDAR Scanner and flash moving to the right side. ...
iPhone 14 Pro Dynamic Island

iPhone 17 Models Rumored to Feature Redesigned Dynamic Island

Monday July 7, 2025 7:38 am PDT by
iPhone 17 models will feature a redesigned Dynamic Island user interface, according to a post today from Digital Chat Station, an account with more than three million followers on Chinese social media platform Weibo. The account has accurately leaked some information regarding future Apple products in the past. The account did not share any specific details about the alleged changes that are ...
Prime Day 25 Feature Warm Triad

The Best Early Prime Day Deals on Apple Products

Saturday July 5, 2025 7:22 am PDT by
Amazon is soon to be back with its annual summertime Prime Day event, lasting for four days from July 8-11, the longest Prime Day yet. As it does every year, Prime Day offers shoppers a huge selection of deals across Amazon's storefront, and there are already many deals you can get on sale ahead of the event. Note: MacRumors is an affiliate partner with Amazon. When you click a link and make a ...

Top Rated Comments

DrFu79 Avatar
146 months ago
If true, this literally has to be the worst acquisitition i can think of.

I hate Beats with a passion - all style, no substance.

As a longtime (20+Years) Apple user, I don't want this kind of philosophy (further?) taking over Apple - all about fashion and brand. Angela Ahrends, Beats etc.

Just make a damn good product and it sells itself by merit. Stop the fluff.

Kids get off my lawn. I know.
Score: 42 Votes (Like | Disagree)
0xyMoron Avatar
146 months ago
Really why should a company worth billions of dollars acquire another company before consulting MR forum posters first?
Score: 41 Votes (Like | Disagree)
touchipods Avatar
146 months ago
Wow, Steve Jobs would have never let this happen.
Score: 16 Votes (Like | Disagree)
mdridwan47 Avatar
146 months ago
Overpriced meets overpriced.
Score: 10 Votes (Like | Disagree)
nzalog Avatar
146 months ago
Google buys Nest and Apple buys Beats. What has the world come to? Embarrassed as an Apple user. :(
Score: 10 Votes (Like | Disagree)
bishopstory Avatar
146 months ago
Please guys stop the Friday morning CEOing!


Take a look at Jimmie Iovine's Wikipedia page, he is the Chairman and co-founder or Interscope Records (http://en.wikipedia.org/wiki/Interscope_Records) and Chairman of Interscope Geffen A & M (http://en.wikipedia.org/wiki/Interscope_Geffen_A%26M) which is part of the Universal Music Group (http://en.wikipedia.org/wiki/Universal_Music_Group) which is the largest music corporation in the World . Also scroll down to the complete Iovine discography.

Spot on dude.
Score: 9 Votes (Like | Disagree)