Following weeks of speculation, Apple has announced its $3 billion acquisition of streaming service Beats Music as well as accessory maker Beats Electronics. The deal is expected to close in Q4 2014, and will make Beats co-founders Dr. Dre and Jimmy Iovine full-time Apple employees. The acquisition of Beats is Apple's biggest pickup yet, and marks the marriage of two tech companies whose products have become a distinguished part of everyday culture. Here's how this landmark deal will affect iPhone owners, Beats Music subscribers and anyone else with an interest in either brand.
Beats Music Isn't Going Anywhere, Even on Android and Windows Phone
Dr. Dre and Iovine challenged Spotify this past January with Beats Music, a subscription service that stands out thanks to some unique personalization features and playlists that are hand-picked by music pros from the likes of XXL Magazine and Pitchfork. In our Beats Music review, we praised the service's curation, attractive interface and the ability for families to share an account.
If you're one of the service's 250,000 subscribers, rest assured that Beats Music will remain its own app after the Apple acquisition, and will almost certainly become a more robust product with Apple's backing. Iovine noted that the app will remain on Android and Windows Phone at Re/code's Code Conference, quelling any fears that the new partnership would make Beats Music an iOS exclusive.
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In fact, the decision to keep Beats Music on non-Apple platforms could help the iPhone maker in the long run, according to Creative Strategies analyst Ben Bajarin.
"Keeping [Beats] on Android is similar to when Apple launched iTunes for Windows, " said Bajarin. "If you think about what iTunes meant to them in terms of selling iPods, it made sense to be on Windows. With the billion-plus Android users, some of which are in smaller markets, using a service from Apple leads to a long-term line of thinking. What if [Apple] released a lower-cost phone in those markets? Would they consider buying it?"
Making Beats Better
Now that Beats Music is part of an ecosystem that includes iTunes and iTunes Radio, we wouldn't be surprised to see some synergy between the Beats app and Apple's long-standing digital music shop. The most obvious connection would be the ability to listen to a song on the Beats app and be able to buy it on iTunes with a single tap.
"While the subscription service is part of a growing trend, artists don't make a lot of money from it. Jimmy [Iovine] and the Beats team are very pro-artist, so I'd imagine they'd want to make a better business model," said Bajarin.
Beats Electronics Still Its Own Brand, Will Expand
Don't worry folks, "Beats by Dre" isn't suddenly going to become "Beats by Tim." Beats Electronics will remain its own headphone brand, meaning you'll still see the iconic "b" on products like the Beats Studio professional headphones and the Beats Tour earbuds.
The already-ubiquitous Beats brand will likely expand with Apple's financial backing, providing even more markets with access to the popular headphones.
"Financially, it’s great, because even in the short term there are synergies," said Apple CEO Tim Cook in an interview with Re/code. "Using Apple’s global footprint, there’s hitting the gas on the subscription service, there’s distributing the headphones globally in countries that they’re not in today."
You can already buy Beats headphones at Apple's online and physical retail locations, and we wouldn't be surprised to see those products gain an ever bigger presence at Apple Stores worldwide once the deal is finalized.
A New Generation of Audio Accessories and Wearables
Products like the iPhone and Beats by Dre headphones have become cultural icons, and it only makes sense for Apple and Beats to team up to create your next favorite gadget. Cook told the New York Times that the companies are working on "products you haven't thought of yet," and Apple Senior VP Eddy Cue said at Code Conference that the company's upcoming product line is its best in 25 years.
A couple of recently published Apple patents may hint at what's to come for both brands. As noted by AppleInsider, Apple has secured a special type of noise-cancelling tech for earbuds that only activates itself when the headphones are in a user's ear, thus limiting the power consumption necessary for noise cancellation. A separate patent deals with sensor-based music playback, which would allow your device to automatically pause your current song the second you pull your earbuds out.
Assuming the rumored iWatch has a fitness focus, we wouldn't be surprised to see Apple leverage Beats expertise for sweat-proof and wireless earphones for that wearable device.
Only time will tell what type of inventions these two tech giants come up with in the future. In the short term, it seems like Beats aficionados won't have to worry about things changing too much on the hardware and software fronts, and fans of both brands could have some sexy new gadgets to look forward to down the line.