Here’s a breakdown of the Apple-Beats deal

In a key session of the early Code Conference, Jimmy Iovine, Beats’ co-founder, revealed that their music service had a relatively small domestic subscriber base: 250,000. This number looked quite small compared to Spotify’s impressive 10 million global users. The Wall Street Journal speculated that this difference in subscriber counts may have led to the restrained valuation of Beats Music in comparison to its Electronics branch, which boasted sales of $1.5 billion in 2013.

Nonetheless, Apple’s robust infrastructure, including iTunes and iTunes Radio, provided an opportunity to greatly amplify Beats Music’s user base. At that time, iTunes Radio – Apple’s acclaimed music streaming platform – had already amassed 40 million users. Furthermore, iTunes had facilitated the sales of 35 billion songs, established more than 800 million accounts (most linked with credit cards) and had gathered extensive customer listening data.

Eddy Cue, the figurehead of iTunes, was optimistic about the upcoming merger, expressing belief that the union would significantly improve Apple’s capabilities.

As per the agreement, Beats co-founders, Jimmy Iovine and Dr. Dre, would join forces with Cue’s team at Apple. Concurrently, Phil Schiller, the Head of Marketing, took over the management of Beats headphones division. In praise of the deal, Tim Cook, Apple’s CEO, commended the broad and profound experience that Iovine and Dr. Dre brought to the company, underlining Apple’s views of Beats Music as a leading music service in delivering expertly curated content.

The closure of the deal was forecasted for the financial year’s final quarter, pending regulatory approvals.

Updated in 2025 to align with recent developments.