Beats co-founder Jimmy Iovine likely to resign as Chairman of Interscope
When the Apple-Beats acquisition goes through (and it seems it already has, but not formally), hip-hop star Dr. Dre will be taking up an executive position within the tech giant’s organization. The same goes for Beats co-founder Jimmy Iovine, according to people familiar with the matter.The Wall Street Journal has it on file from trusty sources that “as Apple completes a deal to buy headphone and streaming-service company Beats Electronics LLC from Mr. Iovine and his co-founder, rap star Dr. Dre, both men are likely to take senior positions with the Cupertino, Calif., tech company [...] commuting from the Los Angeles area to Silicon Valley—or meetings [sic] elsewhere—as needed.”
In other words, don’t expect Dre to come clean shaven every morning in an office set up just for him at 1 Infinite Loop, Cupertino, California. Best he can do is honor Apple with his presence only for important initiatives.
Dr. Dre likely won’t lead any technical meetings either, but you can expect Apple to put him on stage for the iWatch unveiling, or whatever the company has in store for us this year that leverages Beats Electronics technologies. After all, his status in the music industry is part of the reason Apple had to shell out several billion dollars to engulf Beats. So it makes sense for the Mac maker to try and capitalize on that.
As for Beats co-founder Jimmy Iovine, he is likely to resign as Chairman of music label Interscope.
While the acquisition remains to be announced formally, we have every bit of indication that the deal has indeed passed through. A one-minute clip shot by Tyrese Gibson at Dre’s studio shows an ecstatic Dre who now calls himself “The first billionaire in hip hop.” In the video, Tyrese himself is also heard stressing that Dre has just entered the “billionaire boys club.”
Wall Street analysts were baffled to hear the news that Apple had paid such a huge sum of cash to acquire Beats Electronics, with one prominent figure from Piper Jaffray noting, “We are struggling to see the rationale behind this move.”
Gene Munster, the firm’s leading Apple analyst, wrote in a note to clients Thursday evening, “Beats would of course bring a world class brand in music to Apple, but Apple already has a world class brand and has never acquired a brand for a brand's sake (i.e., there are no non-Apple sub-brands under the company umbrella). Separately, we are not aware of any intellectual property within Beats that would drive the acquisition justification beyond the brand.” Munster hadn’t had the chance to see the aforementioned video at the time he issued his research note.