NEW YORK (CNN) – Dr. Dre’s boast of becoming the first hip-hop billionaire could come true. Apple announced it’s buying beats, the headphone company he co-founded.
Apple looks to keep the beat in their music business. It’s buying headphone maker beats electronics co-founded by rapper Dr. Dre, the pricetag on the deal is three billion dollars.
Of course, this is the worst kept secret in silicon valley. News of the deal broke weeks ago with a slightly higher $3.2 billion dollar price tag, but $3 billion is nothing to sneeze at.
It’s still the biggest purchase in apple’s history and a big change for the company.
Apple is usually known to innovate and not outright buy a company and for that much money.
Apple says the deal is about creating the most innovative music products and services in the world and it needs to boost its music mojo.
iTunes radio hasn’t really caught on yet and sales of music downloads have fallen, but some analysts are still questioning whether this deal makes sense, after all, beats’ streaming service only has 500,000 customers.
By the way Dr. Dre is already calling himself the first billionaire in hip hop.
His stake in beats, estimated at 20% to 25%, could push his net worth pretty close to billionaire status.