Apple in talks to buy Beats for $3.2b

Apple is reportedly in negotiations to purchase Beats Electronics for US$3.2bn, which will mark the company’s largest acquisition to date.

The Financial Times speculates that the deal could be announced as early as next week, but notes that talks could still collapse. Under the deal, Apple will acquire the Beats streaming service, as well as the audio equipment business which manufactures the popular brand of Beats headphones.

This follows March reports that Apple was planning to launch its own streaming service; the IFPI Music Report 2014 showed streaming services grew 51% worldwide throughout 2013, while downloads fell 2.1%.

Beats Electronics was valued at $1bn last September, when a minority stake was sold to private equity firm Carlyle Group. Since its January launch, Beats Music has struggled to dent Spotify’s marketshare in the US, with label sources suggesting the service drew less than 100,000 subscribers during its first 100 days of operation.

Beats Music is yet to launch in Australia, but according to a January forum post from Ryan Kaveney, General Manager of Telstra’s Entertainment Group: “We are likely to launch Beats later this year (pre-June 30) and will be the second country in the world to do so.”

If the sale goes ahead, it will dwarf Apple’s other recent acquisitions, which have been modest by comparison. The $350 million paid for Israeli 3D sensing company PrimeSense last November was the most the company had shelled out since the $400 million purchase of NeXT computer systems – Steve Jobs’ company – in 1997.