Apple has confirmed that it will purchase Dr. Dre’s Beats Electronics headphones and music streaming company for the price of $3 billion.
The New York Times reports that “the Beats brand will remain separate from Apple’s, and Apple will offer both Beats’s streaming music service and premium headphones.” This means that both iTunes and Beats Music will continue to exist, but will cooperate in order to better compete against similar subscription- and ad-based services like Spotify and Rdio.
Apple has not revealed the types of products and services that will come out of this deal.
Apple will pay for the acquisition, its largest ever, in $2.6 billion in cash and $400 million worth of stock. This is down from the $3.2 billion price originally discussed.
The deal is the latest entry in Apple’s long history of purchasing companies whose technologies can be integrated into its devices.
Beats co-founders Andre “Dr. Dre” Young and Jimmy Iovine will reportedly work under Eddy Cue, Apple’s executive in charge of internet services.
Iovine confirmed the deal on the official Beats Music blog, adding that he has “always know that Beats belonged with Apple,” as Beats was “inspired by Apple’s unmatched ability to marry culture and technology”.