Apple on Beats Acquisition: We Wanted the People, Not the Headphones

Hardware and music streaming service came second in the costly acquisition

By on May 29th, 2014 09:46 GMT

Apple’s $3 billion / €2.2 billion purchase of Beats announced yesterday is currently the most expensive deal ever signed by the Cupertino giant to acquire new talent. CEO Tim Cook admits he did it primarily to get the people, as such rare talents “don’t grow on trees.”

When rumors broke out that Apple was buying Beats, analysts were baffled to hear the exorbitant purchase price. Everyone immediately thought of the Beats headphones, rather than the people working at Beats Electronics / Beats Music.

It was later speculated that Apple was not so much interested in the electronics as it was in the actual people behind Beats, like Jimmy Iovine, who has his hands in every corner of the music industry, and the engineers that make the Beats magic happen.

CEO Tim Cook confirmed this much in a chat with Re/code following the announcement that Apple had indeed acquired Beats.

“What Beats brings to Apple are guys with very rare skills,” he said. “People like this aren’t born every day. They’re very rare. They really get music deeply. So we get infusion in Apple of some great talent.”

“We could build just about anything that you could dream of,” Cook added. “But that’s not the question. The thing that Beats provides us is a head start. They provide us with incredible people, that don’t grow on trees. They’re creative souls, kindred spirits.”


Among the people being transitioned over to Apple as part of the acquisition is also Beats Music CEO Ian Rogers, who upholds that human curation of music is key to offering a wonderful experience to the user. Cook agrees:

“We get a subscription music service that we believe is the first subscription service that really got it right,” Cook said. “They had the insight early on to know how important human curation is. That technology by itself wasn’t enough — that it was the marriage of the two that would really be great, and produce a feeling in people that we want to produce.”

The Apple CEO also sent out an internal memo yesterday, making the news official internally. In the letter he told everyone who was being hired at Apple as part of the acquisition, who will be reporting to whom, etc.

For example, Dr. Dre will also join the Cupertino company, though his role isn’t very clear. The hip-hop star pledged to do “as much as it takes” for Apple, which probably means he’ll be mostly present with the name. Cook has bigger plans for the Beats Music team, which will join Eddy Cue’s iTunes team.

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