Although officially unconfirmed, The Financial Times reports Apple and Beats Electronics are close to striking a deal that would sell the high end audio company to the computer giant for $3.2 Billion and that it could be announced as early as next week.
If successful, this would be the largest purchase in Apples 38 year history.
Speculators say Beats Music, a streaming music service, is the real target of this acquisition. Apple’s own streaming service, iTunes Radio, has performed less than admirably and the iTunes music store has been on a steady decline in sales over the past few years.
In contrast, streaming services Pandora and Spotify have steadily increased, taking the lion’s share of the market.
It would be much easier for Apple to buy a big name turn-key operation as opposed to building another service from the ground up.
Beats Electronics was founded by rap music superstar Dr. Dre and music producer Jimmy Iovine in 2008 and originally made high end (and high priced) headphones.
In 2012, Beats acquired MOG music streaming service and re-launched it as Beats Music in January. Except for a deal struck with AT&T (that allowed up to five family members to pay $15 a month for the service as long as they were AT&T wireless customers), reception of the new service has been lukewarm.
This isn’t the first time Beats has gone into business with a phone maker. In 2011, Taiwan’s HTC bought a majority stake in Beats only to part ways 2013.