Apple officially buys Beats for $3 billion

Apple officially buys Beats for $3 billion

After weeks of rumors and speculation, Apple finally confirmed it will buy Beats Electronics for $3 billion. With this purchase, Apple will finally have a streaming music service it sorely lacked. With the two companies combined, Apple can finally catch up to competitors like Spotify.

Apple’s official press statements talk about music being an “important part of Apple’s DNA” and indeed, music has been a huge part of Apple’s success. The company revolutionized digital downloads of music with its iTunes store. The company even waged war against digital rights management for music in 2007.

But Apple has stopped innovating in the music space for quite a while now. The last music product it released was iTunes Radio, which allows users to listen to customized radio stations. Still, it wasn’t a music subscription service, which Apple needs in the wake of declining iTunes sales.

Beats, however, does have a music streaming service called Beats Music. Although Beats Music is struggling to find subscribers, Apple could turn the service into a strong competitor to Spotify.

Immediately after news of the acquisition, Beats Music lowered its annual subscription price and extended its trial period. New users now have a 14 day trial, versus the 7 days available previously. The annual subscription will cost $99.99 per year instead of $119.88.

Apple’s press release implies that iTunes Radio and Beats Music will remain different products but that could change in the future.

Source: Apple

Via: TechCrunch

Follow Lewis on Twitter @lewisleong

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