After weeks of speculation, Apple confirmed just moments ago that it has reached a deal to acquire Beats Electronics and Beats Music for $3 billion. Beats co-founders Jimmy Iovine and Dr. Dre will be joining Apple, the company announced. Beats is best known for its popular lineup of headphones, speakers and audio software, and in January launched a new streaming music service called Beats Music in partnership with AT&T.

This marks the largest acquisition that Apple has ever made, divided into a purchase price of $2.6 billion and approximately $400 million that will vest over time. But it comes at a pivotal time for Apple, as iTunes music sales decline in light of the rising popularity of streaming music services. Apple will now operate its own streaming music service in Beats Music, going head on against competitors like Spotify and Pandora…

It is unknown exactly what role Iovine and Dre will have at Apple, although The Wall Street Journal reports that their title will simply be “Jimmy and Dre” at One Infinite Loop. Beats will remain a separate brand under Apple, and the service will operate separately from the iTunes Store. Iovine and Dre, meanwhile, are tasked with working on special projects.

“They’re going to be coming up with ways of features that blow your mind,” Apple chief executive Tim Cook told The New York Times, “and products you haven’t thought of yet, and seeing around the next corner to articulate the way to take music to an even higher level than it is now.”

In addition to Iovine and Dre joining the company, Beats Music CEO Ian Rogers and the team underneath him will now report directly to Eddy Cue, Senior Vice President of Internet Software and Services at Apple. Rogers and Cue will be speaking at the Re/code Code Conference later tonight, which will hopefully shed some light on some of the more specific details surrounding this acquisition.

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Cook, Iovine and Cue issued prepared statements following the acquisition:

Apple CEO Tim Cook:

“Music is such an important part of all of our lives and holds a special place within our hearts at Apple,” said Tim Cook, Apple’s CEO. “That’s why we have kept investing in music and are bringing together these extraordinary teams so we can continue to create the most innovative music products and services in the world.”

Beats co-founder Jimmy Iovine:

“I’ve always known in my heart that Beats belonged with Apple,” said Jimmy Iovine. “The idea when we started the company was inspired by Apple’s unmatched ability to marry culture and technology. Apple’s deep commitment to music fans, artists, songwriters and the music industry is something special.”

Apple SVP of Internet Software and Services, Eddy Cue:

“Music is such an important part of Apple’s DNA and always will be,” said Eddy Cue, Apple’s senior vice president of Internet Software and Services. “The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years.”

Apple will continue operating Beats Music as a subscription music service, meaning that Android and Windows Phone versions of the app will remain available following the completion of the deal. Beats Music is now available for a $99.99 yearly subscription with an extended 14-day trial available to everyone. iTunes Radio, the steaming radio service that Apple launched last year, will also remain available.

Just moments after announcing the acquisition, Cook issued an internal memo to Apple employees to discuss what the deal means for the company going forward. In the memo, the CEO stresses that Beats Music is the “first subscription service to really get it right,” and that he is excited to begin this new chapter in the company’s nearly forty-year history.

While it is a narrative that is often overplayed, this acquisition is perhaps the most important move that Tim Cook has made since taking over the reigns at Apple following the passing of Steve Jobs. The additions of Iovine and Dr. Dre could also contribute to a cultural change at the Cupertino-based company, which has faced a fair amount of criticism recently for not launching any major new products since the iPad in 2010.

That could change in the near future, however, as Apple has long been rumored to be working on an iWatch smartwatch. The company is also expected to announce iOS 8 and a new version of OS X at its WWDC keynote next week. Healthbook is expected to be one of the major new features of iOS 8, potentially pairing with the iWatch to provide vital health information such as cholesterol levels, respiratory rate, daily activity and more.

Apple confirmed that the Beats deal will be completed by the end of the fiscal year, meaning that it should be finalized no later than September. The acquisition has not had a significant impact on Apple stock, with AAPL shares rising less than 1 percent in after hours trading.

  • There. Now can we move on?

  • Mini Apple Genius

    Wonder if this will have anything to do with the fact that they may be updating iTunes song quality at WWDC.

    • Chindavon

      HD audio will be the new wave of music moving forward IMO.

  • Framboogle

    I guess it’s only a matter of time before…

  • Maxim∑

    Apple has a lot of work to do… but it makes sense in the long run. And having Jimmy Lovine is pretty huge

    • Daniel Eliasson

      Whos Jimmy Lovine? I think you mean Jimmy Iovine.

      • Elias Chao

        First time I saw his Last name, I also thought it was a lower case “L”, LOL.

  • Jacob Galea

    Tell me when I have a spotify replacement. Speaking of spotify… One year later still no updates spotify for ipad?

  • Sokrates

    Such a large acquisition is alarming in my view. Apple has never been a company that had to acquire such large amounts of external know-how.

    • There never been so many tech companies churning out innovative products. Apple used to have all the talent, now all of these companies have equal talent, if not more. It’s not a reflection on Apple’s talent so much as it is a reflection on the rest of the talent out there.

      • Sokrates

        interesting! why do you think there’s so much more talent around?

      • Resources are more readily available. Anyone can purchase software these days and coding and the internet are easier than ever. Plus, everyone wants to be the the “next” Apple.

  • Mr Mop

    Now that the deal is going through, will Beats be cut off from other companies like HP?

    • regkilla

      HP will still be able to have Beats technology on their computers until 2015.

  • Mohammad Ridwan

    I’m gonna leave it here and slowly back away.

    • Sokrates

      good one!

  • Chindavon

    Best purchase ever. Beats with every iPhone purchase??

    • felixtaf

      In our dreams!

  • Sokrates

    I’m hoping for plain white beats with an subtle grey Apple logo!

  • Kyle Davis

    Disappointed nobody made a fruits and vegitables comment yet.

    • 空白

      Slow down bro, you’re too fast for us.

  • Shadowlink

    Lmao at all the people that are actually happy about this!

  • jose carlos

    Spotify is still the BEST.You can stream ur playlists 4 FREE and has matched it.Knowing apple track record it’s about busines the professional word 4 GREED.FACT!

  • Evangeloz Tsalikidis

    So now we might get DETOX?

  • George

    How boring

  • Gucciipad

    Instead of normal head phones that comes with iphone. We will get beat head phone

  • Raul M

    Can the upcoming iPhones please have beats headphones with them along with beats audio tech in the iPhones!!!

  • edithouse

    hey, who knows, maybe the good dr. dre will be able to help some of the fanboys remove the apple stick from wayy too far up their asses.

    but then again, perhaps the doctor can make even more money from iSheep by *not* removing them 😉