It looks as if the Apple acquisition of Beats Electronic will be going down, but so will the price. A report from the New York Post says Apple’s Beats buy – including the headphone and electronics division, and the music streaming service – will carry the low, low price tag of a mere $3 billion.
The original acquisition was reported on May 8th, and since then, a leading player in the subscription music industry, Spotify, has announced that it had 10 million paying subscribers. It’s possible that Apple used this as a bit of leverage to get the price down a bit.
Still, the company is understood to place a high value on the profitable Beats audio business which retails headphones — costing up to $450 — and speakers around the globe.
That business recorded sales of $1.3 billion in 2013.
“Apple hadn’t even begun its due diligence process when news of the number came out,” one source close to the talks said Tuesday.
The Post reports that Beats co-founders Jimmy Iovine and Dr. Dre are still expected to appear at Apple’s Worldwide Developer Conference next week.
MacRumors notes that Dre should net around $750 million from the sale for his 25% share of Beats. One can only wonder if his premature “announcement” video about the deal cost him a little money in the deal.