Hip Hop's First Billionaire
Apple buy Beats for 3.2 Billion, a deal that looked to be rotten after the Doctor released a video of himself drunk on Heineken boasting about being Hip Hop`s First Billionaire.
Apple has finally made the news official, they will be buying Beats for $3 billion. The deal has been in the works for weeks and was very closed to being called off after a video was released of the hip hop beat-making legend, boasting about being hip-hop's first billionaire and that he was drunk on Heineken.
After the release of the video, Apple made sure to clarify the deal was not final, and that they were in the process of ensuring that acquiring Beats, along with all of its street cred, would be a good fit with the Apple brand. After watching the video, it is clear that Apple was uncomfortable with the language used, and worried about potential backlash.
Thankfully they came to their senses, realizing that there would probably be a bigger backlash if the deal was cancelled over the video, which could have lead to publicity nightmare over racism. In the end this is exactly what Apple needs to retain its cool factor, considering that Apple is sitting on a mountain of cash with earnings reported at $159 billion last year.
Even though the deal is a merely a drop in the bucket for Apple, a few market analyst believe that Apple is wasting its time with Beats, whose music streaming service only has an estimated 500,000 customers. In contrast, Pandora is valued at $5.2 billion and has over 250 million active accounts.
Reassuring apple investors, CEO Tim Cook released a statement saying that the deal brings together "extraordinary teams so we can continue to create the most innovative music products and services in the world."
The real winners of the deal are Beats co-founders Jimmy Lovine and Dr. Dre, who grew the company quickly using celebrity endorsements. The deal is set to close by late summer, and will see Lovine give up his CEO position at Interscope Geffen A&M.