Apple has confirmed its much-rumoured acquisition of Beats Music and Beats Electronics for a total of $3 billion.
The deal includes the streaming music service, Beats Music, and Beats Electronics, which makes the ever-popular Beats headphones.
As part of the deal, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple.
In a statement, Tim Cook, Apple CEO, said: "Music is such an important part of all of our lives and holds a special place within our hearts at Apple.
More after the break
"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."
Eddy Cue, Apple’s senior vice president of Internet Software and Services, seemingly confirmed the Beats Music streaming service would remain separate from iTunes: "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."
Rumours of an iTunes streaming service to rival Spotify surfaced earlier in the year but it seems Apple will now simply put its considerable weight behind Beats Music, which launched in the US in January 2014.
Earlier this month reports suggested Beats Music had only managed to muster around 110,000 subscribers. The Apple tie-in looks likely to change that.
In an email to Apple employees, as reported by 9to5Mac, Tim Cook said it was a chance to bring Apple's expertise to one of the biggest-selling brands in Apple stores.
"Beats Electronics has become the brand of choice for headphones and speakers in both the music and sports world, just five years after its launch," Cook said.
"They are among the most popular and highest-rated third-party products sold today in Apple’s retail and online stores. We see an incredible opportunity to bring Apple’s legendary design and engineering capabilities to these popular products under Phil’s leadership."
He also revealed the company would work to improve on Beats Music, which he claimed was the first subscription music service to "get it right".
"Beats Music was built with deep respect for both artists and fans. We think it’s the first subscription service to really get it right. Both Apple and Beats believe that a great music service requires a strong editorial and curation team, and we will continue to expand what we do in those areas.
"The addition of Beats will make our incredible iTunes lineup even better, extending the emotional connection our customers have with music."
Jimmy Iovine, co-founder of Beats, said: "I’ve always known in my heart that Beats belonged with Apple. 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."
The deal means Beats products will be offered in many more countries through the Apple Online Store, Apple’s retail stores and select Apple Authorised Resellers.
Apple said that it expects the transaction to close in fiscal Q4.
by Joe Cox