Apple Inc. (AAPL : NASDAQ) is close to finalizing a purchase of Beats Electronics for $3.2 billion dollars. The deal would be the largest acquisition for the iPhone manufacture and could see numerous benefits with Beats technology and music infused in future Apple products. While the acquisition may turn heads at first, the purchase could help Apple expand its music reach along side it’s own iTunes application.
Apple would also be the third company in recent months to make a billion dollar acquisition. Facebook recently purchased WhatsApp for $16 billion and Google purchased Nest for $3.2 billion.
And while those companies seem to focus on messaging and home automation, Apple seems to be pivoting to compete with the likes of Jawbone’s Jambox and Bose SoundLink. Beats Electronic would also give Apple a new product, something it has not seen since the launch of the iPad in 2010.
This is not the first time Beats Electronics has been invested in by a phone manufacture. In 2011, HTC purchased 51.1% of Beats to improve sound quality in mobile phones. Although that investment was later purchased back by HTC a year later, Beats has continued to raise a high profile with endorsements to popular athletes and musicians. Beats Electronics also has expanded into a music subscription service, Beats Music.
The subscription-based service was released in January of this year to compete with music giants Spotify and Google’s Play Music. Although the app is similar to it’s competitors in that they are all subscription based, Beats Music focuses more on tailored recommendations by musicians such as co-founder of Beats, Rapper Dr. Dre. If the deal does go through, Apple will instantly become revitalized in the music market and Beats Electronics will have enough funding to take its products to a new level.
The last major purchase Apple did complete was in 1997, when Apple purchased NeXT for $400 million. That purchase also happened to include Apples founder, Steve Jobs.