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Following the official announcement regarding Apple’s $3 billion acquisition of Beats Electronics and Beats Music, Apple CEO Tim Cook has sent a letter to employees regarding the deal. Cook goes through Apple’s focus on music throughout its history, how Apple and Beats will be structured upon the closing of the deal later this year, and why this acquisition is important.

Apple’s history in music began with selling Macs to musicians. That remains important to us today, but we also bring music to hundreds of millions of customers with iTunes, which is at the forefront of the digital music revolution. Music holds a special place in our hearts at Apple, and we know that we can make an even bigger contribution to something that is so important to our society. That’s why we have kept investing in music and why we’re bringing together these extraordinary teams — so we can continue to create the most innovative music products and services in the world.

Beats co-founders and music industry pioneers Jimmy Iovine and Dr. Dre will join Apple, along with their team of employees. Jimmy has been on the cutting edge of innovation in the music industry for decades, including as a key partner for Apple in the launch of the iTunes Music Store more than ten years ago. He has produced or collaborated with some of the most popular artists in history, and been an important contributor to the success of the iTunes Store.

Beats Music was built with deep respect for both artists and fans. We think it’s the first subscription service to really get it right. Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas. The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music.

Beats Music (along with Jimmy Iovine and Dr. Dre) will be integrated into Eddy Cue’s services team while headphones and speakers will now fall under Phil Schiller’s domain. Cook ends his letter by saying “I hope you are as excited as I am about this new chapter in our history.” You can read the full memo below:

Team,

This afternoon we announced that Apple is acquiring Beats Music and Beats Electronics, two fast-growing businesses which complement our product line and will help extend the Apple ecosystem in the future. Bringing our companies together paves the way for amazing developments which our customers will love.

Music is an important part of our lives and our culture. Music has the power to inspire us, to comfort us, and to send our emotions soaring. It brings people together and transcends the limits of spoken language.

Apple’s history in music began with selling Macs to musicians. That remains important to us today, but we also bring music to hundreds of millions of customers with iTunes, which is at the forefront of the digital music revolution. Music holds a special place in our hearts at Apple, and we know that we can make an even bigger contribution to something that is so important to our society. That’s why we have kept investing in music and why we’re bringing together these extraordinary teams — so we can continue to create the most innovative music products and services in the world.

Beats co-founders and music industry pioneers Jimmy Iovine and Dr. Dre will join Apple, along with their team of employees. Jimmy has been on the cutting edge of innovation in the music industry for decades, including as a key partner for Apple in the launch of the iTunes Music Store more than ten years ago. He has produced or collaborated with some of the most popular artists in history, and been an important contributor to the success of the iTunes Store.

Beats Music was built with deep respect for both artists and fans. We think it’s the first subscription service to really get it right. Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas. The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music.

The Beats Music team will report to Eddy. The teams will be getting to know each other better in the weeks ahead, and we are very excited about the possibilities for the future.

Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch. They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores. We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership.

Please join me in welcoming Beats to Apple. I hope you are as excited as I am about this new chapter in our history.

Tim

 

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20 Responses to “Cook to employees on Beats buy: ‘I hope you are as excited as I am about this new chapter in our history’”

  1. All in all sounds like a good purchase.

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  2. rogifan says:

    Why would Tim put Phil Schiller in charge of Beats hardware design and engineering? He’s SVP of marketing.

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    • irelandjnr says:

      Marketing sets the direction at Apple. That’s why Apple’s so successful. If Apple was run by sales guys they care just about money, Apple is different.

      Like

    • Because Beats electronics is a consumer electronics brand that Apple marketing now needs to manage. As time goes on design and hardware collaboration will occur, but first and foremost Beats is a highly successful “high-end” brand that Apple just paid a lot for.

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      • rogifan says:

        So as suspected, it’s not about amazing hardware they had but a brand that marketing needs to oversee. I guess the good thing is Ive and Riccio won’t have to waste their time on this stuff…

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    • acslater017 says:

      Very telling, because there is nothing of value in Beats audio technology! Beats the highly regarded -if unpopular – streaming service will go to Cue (iTunes). Beats the celebrity headphone giant will report to Schiller, the marketing chief. They will get some of that Oscar selfie magic. Maybe to work with Kobe and other potential iWatch movers and shakers?

      Like

  3. Eli Matar says:

    It’s an interesting move. But what will those 2 people be working as?

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  4. That’s a lot of money for a company that makes overpriced, mediocre headphones…can only hope that Apple will surprise with something decent from this acquisition…

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    • I’m with you there, Randy James. Beats are dead, boomy, and overpriced and you can add overhyped to that, too. Much cheaper and better (and USA made, in Brooklyn) are made by Grado. And there are many other alternatives as well.

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    • Randy, how much do you think Apple should have paid for a Company that makes over $1 billion a year (from headphones only)?

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    • James Katt says:

      Beats pays for itself. Beats makes $500 Million in profit each year. With Apple’s help, Beats can easily reach $1 Billion a year in profit. This means Apple gets Beats FOR FREE in 3 years. After that, everything Beats brings in is pure gravy profit for Apple.

      That is what I call a great investment.

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  5. 2112entropy says:

    Hoping this ends up being a good deal with a multitude of benefits for Apple. But honestly this is just odd bedfellows.

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    • James Katt says:

      Apple and Beats are not odd bedfellows at all. Both are hardware companies that make great profit and are highly popular. Steve Jobs and Jimmy Lovine have known each other for years. Steve called Jimmy the only software developer who has successfully developed hardware. Both have talked about music streaming for years. Jimmy helped develop the iTunes Store. Both companies are dedicated to music. Apple is the only company to bridge the gap between technology and art. Beats will continue that trend. And both Jimmy Lovine and Dr. Dre will make that relationship even closer with their pull in the entertainment industry. They give further coolness to Apple.

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  6. Marklewood at Serenity Lodge says:

    Trying on beats today for the first time. I’m not impressed. I’ll give it the two weeks, though.

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  7. I don’t like it. And I really don’t see the value for apple. Apple is about exceptional quality, beats headphones are not good headphones. They don’t sound good, they’re overpriced and cheaply built. Two of my colleagues have beats and both broke within a few months. I have no idea how those headphones could become so popular. But even if the assets in question appeal to apple somehow, why such a high price? 3 billion?! I just don’t get it. 300 million maybe. Can someone please explain this to me?

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