New report says Apple-Beats deal was close to falling apart, but is still on

Apple Beats

It’s been two weeks since we first received word that Apple was looking to acquire Beats Electronics, and we still haven’t heard a peep about the sale from either company. Some folks have taken the silence as a sign talks had broken down, but a new report says that’s not the case.

According to TechCrunch, sources with knowledge of the deal say that Apple’s planned multi-billion dollar acquisition of headphone maker Beats will go through. The outlet does note, however, that negotiations have been bumpy and close to falling apart on multiple occasions…

Here’s TechCrunch’s John Biggs with the scoop:

A well-placed source has confirmed rumors that Apple’s acquisition of Beats “is happening” but was close to falling apart multiple times. The source said with “70% certainty” that Apple’s planned multi-billion acquisition of headphone maker Beats will go through. […]

Rumors in Asia also point to previous moves by Samsung to buy the Beats brand, a deal that fell through “earlier in the year.” Apple’s efforts, it seems, will bear more fruit. “The deal hasn’t fallen apart yet,” the source said.

A second report from TechCrunch, this time by Josh Constine, aims to shed a little more light on Apple’s reasoning behind the rumored buyout. Again citing sources familiar with the deal, the writer says it’s about helping facilitate the iTunes transition from digital downloads to streaming.

But according to a source with direct knowledge of iTunes’ executive strategy, by buying and operating an external streaming service like Beats, Apple can coin off a smooth transition without cratering the record business. The record labels and artists depend on the approximately $1 billion iTunes earns them selling downloads each year which could be disrupted if the 800-million account store shifted to subscription streaming.

In short, turning iTunes into a streaming-only service is frightening to an industry fast losing cash to streaming upstarts and — by maintaining iTunes as an album/a la carte music sales service while running Beats as a sideline — the company can have it both ways. 

Both reports add that Apple is also largely interested in bringing Beats co-founders Dr. Dre and Jimmy Iovine on as executives. The pair offer cool marketing savvy and several decades of experience in the music industry, and would fit in with the company’s otherculturally aware‘ hires.

Again, neither company has confirmed or denied the acquisition rumor yet, but Dr. Dre seems to think it’s a done deal. Earlier this month, the Beats executive was seen in a video celebrating becoming ‘hip hop’s first billionaire.’ A $3.2 billion buyout would reportedly net Dre $800 million.

For more theories on what Apple could want with Beats Electronics, click here.