Dr Dre is several hundred million dollars richer today after US tech giant Apple confirmed, what we already pretty much already knew, that they are buying Beats By Dre for $3 billion dollars.
The amount is actually a little less than what was previously reported, with the offer made up of both cash and stock.
Many analysts are still scratching their heads as to why Apple would want to buy the headphone maker and while Beats’ newly launched streaming service does have its appeal, leaked figures from last week showed it had only a few hundred thousand users which pales in comparison to Spotify’s 40 million.
Clearly Beats is a profitable endeavour but compared to Apple’s cash cows like the iPhone and iPad, the numbers just don’t really seem to stack up.
So what’s really in it for Apple? Well nobody really knows, Beats offers a decent brand and some hardware know-how, but on the face of it, it doesn’t appear to be doing anything Apple couldn’t do if it really wanted. Especially if rumours are to be believed that it was actually Monster who were the real brains behind Beats’ early success.
Only time will tell what Apple really has planned for its acquisition but one thing we do know is Dr Dre is going to bed tonight a very happy man. Tim Cook and Apple’s hungry shareholders, probably less so.