A major business move for the makers of the iPhone.
Apple is striking a new chord with a $3 billion acquisition of headphone and streaming music company Beats Electronics.
The growing popularity of music streaming services such as Pandora and Spotify has been reducing sales of songs and albums, a business that iTunes has dominated for the past decade.
Apple Inc. broke into music streaming with the launch of iTunes Radio last September, but the Beats deal is a sign that the service hasn’t been a big hit.
Beats launched its streaming service earlier this year to supplement its trendy line of headphones.
Beats’ founders, rapper Dr. Dre, whose real name is Andre Young, and Jimmy Iovine, a longtime recording industry executive who’s stepping down as chairman of Universal Music Group’s Interscope Geffen A&M Records, will both become key executives in Apple’s music divisions. Apple CEO Tim Cook says their roles haven’t been determined yet.
This deal is by far the most expensive acquisition in Apple’s 38-year history.