Apple to Acquire Beats for Just So, So Much Money
Apple is reportedly finalizing a deal to purchase Beats Electronics for 3.2 billion dollars, which means that Dr. Dre just made more cheese than the state of Wisconsin.
Before we consider the industry implications of this, let’s all take a second to think about that number. 3.2 BILLION dollars. That’s kill your cousin money. That’s make you forget you had morals money. That is literally (literally meaning literally, not figuratively), $200 million more than the gross domestic product of Belize. When an acquisition is valued more than an entire GDP of one of the fastest growing countries in the Western Hemisphere – that’s a special kind of money.
Beyond the fact that 3.2 billion dollars is simply a mind-boggling number, the sale also has special implications for one of Beats Electronics’ founders, Dr. Dre. Dre, who co-founded Beats in 2006 with music mogul and Macklemore arch nemesis Jimmy Iovine, currently has a net worth around $550 million. This places him second to Sean “Diddy” “Puffy” “P. Diddy” “Puff Daddy” “Kashi Puff Cereal” Combs on the list of hip-hop’s wealthiest artists. However, with an estimated 20-25% stake in Beats, Dre is projected to make between $640 million and $800 million dollars (before taxes) from the acquisition, enough to place him handily above Combs on the list of richest hip hop artists. Dre celebrated this accomplishment in appropriately drunk fashion with Tyrese (video below), leading many to believe the acquisition is a done deal and causing even more people to question why “motherfuckers forgot about Dre.”
The deal also carries special implications for Apple. Beats currently makes up approximately 60 percent of premium headphones sales in the United States. This means that Apple will immediately be taking over the most dominant force in a growing industry. Apple already holds a 20 percent global market share in the personal computer and tablet market, as well as a 40 percent market share in the smart phone market, so this deal would place them as the leader across all three of the major consumer handheld tech markets. By inking this deal Apple just made a statement almost as bold as “fuck tha police.”
A lot has been said regarding the actual value of the premium headphone market and the sonic quality of Beats’ products; however, looking at these numbers, it is clear that this deal isn’t simply about money. It’s about Apple telling the world that they are going to do everything they can to be the dominant face in the tech world. It’s about Apple using an inventive, hip company to bolster its company image as a company of leaders and innovators. It’s about Apple making a statement – and it’s pretty hard to ignore a statement backed by a 3.2 billion dollar megaphone.