Apple to keep Beats brand separate after the acquisition, impressed by ability to convert users to paid subscribers

Beats Music - Apple

With Beats Electronics on the verge of being acquired by Apple, details are emerging as to how the Cupertino giant could look to handle operations. It is said that Beats will be kept separate and mostly independent, with Apple only providing input whenever needed. This is mainly due to the brand recognition Beats products enjoy in the market.

Apple was mostly said to be interested in the music streaming service Beats Music, which was launched not too long ago. Although when one of the co-founder of Beats Jimmy Iovine pitched the idea to Steve Jobs and Tim Cook a few years ago, they seemed hardly interested.

But given the success Beats Music has seen over the past couple of months, especially with regards to attracting more paid subscribers, Apple has clearly had a change of mind.

Apple became interested in doing a deal with Beats after executives were impressed by Beats Music, the online music streaming service unveiled earlier this year, which was rapidly converting users into paying subscribers, said a person with knowledge of the talks, who asked not to be identified because the discussions are private. 

Beats is also well known for its high-end headphones business, which is profitable, and Apple plans to work with the company to improve the quality of design in future versions, this person said. 

It is believed that Iovine will leave his position as the chairman of Interscope Geffen A&M records to join Apple, which could help the company land some future deals with major record labels. The co-founder of Beats, Dr. Dre could also be offered a senior position at Apple as part of this deal.

It will be interesting to see if Apple continues to offer iTunes Radio which is available for free or phase it out in favor of Beats’ streaming music service, which is a premium service available for $9.99 per month. It would be quite confusing if it continues to offer both.

[Via Bloomberg]