Apple Pays $3 Billion for Dr. Dre’s Beats

Apple Pays 3 Billion for Dr. Dre's Beats

Apple has officially announced that it has purchased Dr. Dre’s Beats Electronics for $3 billion.

With iTunes sales slowing, the move gives Apple something it desperately needs to compete in today’s digital music world – a subscription music service.

While Apple’s App Store revenue is increasing, Morgan Stanley analyst Katy Huberty notes that iTunes revenue is falling as users turn to streaming services such as Pandora and Spotify to meet their music needs.

Spotify, which is generally viewed as the leader in streaming music, has 10 million paying subscribers or about 25% of its over 40 million active user base. If Apple charges $10 per month, same as Spotify, every 1% penetration of Apple’s 800 million user base, equates to $960 million revenue annually, adding 8 pts of growth to online services and half a point to total company growth.

Click here to read more

Source: EURWeb

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s