Dr Dre Joins Apple In $3bn Beats Acquisition
Dr Dre and recording impresario Jimmy Iovine have joined Apple after the $3bn acquistion of Beats Electronics was completed.
The announcement comes nearly three weeks after deal negotiations were leaked to the media.
At $3bn (£1.8bn), the deal for the headphone and streaming music company is the most expensive acquisition in Apple's 38-year history.
It includes $2.6bn (£1.6bn) in cash and $400m (£239m) in Apple stock that will vest over an unspecified time period.
Apple broke into the music streaming business last year with the launch of iTunes Radio, but with $1.1bn (£660m) in revenue last year, Beats should boost the tech giant's earnings once the new fiscal year begins in October.
"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," Apple CEO Tim Cook said in a media release.
"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."
Iovine, a co-founder of Interscope Records, said: "I've always known in my heart that Beats belonged with Apple."
Later, while speaking at a technology conference, Iovine said Apple's earphone offerings had left him underwhelmed.
He said the company makes them simply "to make sure the (iPhone) works".
He added: "You listen to Apocalypse Now, and the helicopter sounds like a mosquito."
Iovine also joked that he had "asked Apple every day for the last ten years" to work in partnership.
The growing popularity of music streaming services such as Pandora and Spotify has been reducing sales of songs and albums, a business that iTunes has dominated for the past decade.
US sales of downloaded songs slipped 1% last year to $2.8bn (£1.7bn) while streaming music revenue surged 39% to $1.4bn (£840m), according to the Recording Industry Association of America.
Mr Cook says Beats Music has more than 250,000 subscribers.
Beats also commands 62% of the $1bn (£600m) US market for headphones priced above $100 (£60), according to market research firm NPD Group.
The acquisition will see both Dre, 49, and Iovine, 61, become executives in Apple's music divisions, though Mr Cook said their roles have not yet been determined.
Dr Dre, whose real name is Andre Young, started his career in influential rap group NWA before co-founding Death Row Records and going on to produce some of the biggest names in hip hop.
Apple co-founded Steve Wozniak said Apple was "getting back to some cool roots".
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