Apple Acquires Beats: Sees Future In Music?

By Hannah Ash, contributing writer

For a Silicon Valley startup whose primary focus was on taking computers to homes across the country, Apple’s announcement today that it plans to acquire Beats marks a new direction and perhaps, new plans for the company’s future. Beats Electronics, currently headquartered in Santa Monica, CA, creates audio products and equipment. In 2006, the company was founded by the legendary hip hop artist Andre Young (Dr. Dre) and Jimmy Iovine, Interscope-Geffen Records chairman.  A glance at Apple’s acquisitions since its inception in 1976 Cupertino, CA shows a record of purchasing personal computer and software related companies almost exclusively.

It’s no secret that the iPod’s first release (in 2001) revolutionized both music and Apple itself. Though the iPod, and the subsequent iPhones and iPads that followed, have enjoyed skyrocketing success, accessories have largely been created by third-party companies such as Nike, Belkin, and Bose. With Apple’s acquisition of Beats Electronics, Apple could be looking to expand beyond simply selling music playing devices to building an empire of some kind. According to a press release from Apple, both Iovine and Young will be joining Apple to continue their work on Beats Electronics. Though it is possible Apple is looking to expand their music products, some are speculating Apple’s main interest in the purchase is Beats’ subscription music service.

The Beats subscription service launched in January of this year, and like other subscription services, charges a monthly fee in exchange for unlimited music listening. Though Steve Jobs originally refused to move to a subscription service, stating, “people want to own their music,” times have changed. Though for years the rate of paid downloads grew annually, last year marked a shrink in digital downloads with the leading subscription music service Spotify posting the largest growth in digital music. In 2012, Apple acquired the Italian music software company Redmatica, which allowed both seasoned and inspiring musicians to access audio files and create samples. Now that Apple has aligned itself with ‘beatmaster’ Dr. Dre, the Beat subscription service could expand beyond simply offering listeners monthly audio to a product line, whether software or hardware, geared at Apple’s many musician fans.