Apple took an interest in buying Beats Electronics because of Beats Music, according to a Bloomberg source claimed to be familiar with acquisition talks. Beats Music launched just earlier this year, but Apple executives are said to have been impressed by Beats' ability to convert people into paying subscribers. That could imply that Apple wants to improve iTunes Radio by upgrading its design and/or introducing more subscription options. The closest thing to an iTunes Radio subscription is iTunes Match, which removes ads from Radio but is intended mainly as a way of backing up a personal library and streaming it anywhere.
As for Beats' better-known headphone business, Apple will allegedly work with the company on improving the design of future headphones. Beats' technology is also built into speakers in some electronics, but plans for that hardware have gone unmentioned.
Talks between Apple and Beats are said to have accelerated in recent weeks. The source adds that Beats' Jimmy Iovine has been seen around Apple's Cupertino campus in the past week, and that he may be brought into the Apple hierarchy, reporting to CEO Tim Cook.
It's believed that an acquisition could be announced as soon as this week. The deal is expected to cost $3.2 billion, making it Apple's most expensive takeover ever. Beats co-founders Iovine and Dr. Dre should profit significantly; Iovine owns 25 percent of Beats, and the combination of that and over five decades of music production is forecast to push Iovine's net worth over $1 billion. Dr. Dre should collect $640 million from an acquisition.
