Apple recently announced that the company had acquired Beats for a sum of $3 billion and it brought up a lot of interesting questions for the direction of both companies, which Beats co-founder Jimmy Iovine and Eddy Cue, the SVP of Apple were more than happy to discuss. They started with the details of the deal and how the stage for the future at the inaugural CODE Conference.
Details had earlier trickled in that Apple had signed a deal where they would have to pay $2.6 billion in cash and another $400 million in terms of equity for the Beats team and its assets. The two heads revealed that the Beats service has managed to amass a subscriber base of almost 250,000 after a period of only three months.
As a result of the acquisition, Jimmy Iovine has made a decision to quit his day job at Interscope Records and join the Apple family on a full-time basis. Dre, an integral part of the Beats line, and Iovine will both have to report to Apple’s SVP of Internet software and services from now on.
According to Cue, there were three major points of interest for Apple in Beats. Apple wanted to cash in on the combined talents of Dre and Iovine, they wanted a piece of the premium music hardware line, which Cue termed as “hugely successful”, and they took interest in the Beats Music line. Cue added that the acquisition was an incredible feat since the two giants would be working together in harmony from now on.
The deal states that Beats Music will continue to run independently of the iTunes music group. They will also retain the creation of new hardware even though they will no longer rely on their previous design structure. The new deal mainly deals with bringing in some serious hardware revenues for the companies.