According to people familiar with the matter, Iovine’s and Dre’s exact contributions to Apple remain unclear, but sources suggest their presence could be used to both improve negotiations with music labels and attract a younger, more affluent clientele that tends to purchase Beats’ high-end headphones.
Iovine allegedly will leave his position as Chairman of Interscope Geffen A&M records, a division of Vivendi SA’s Universal Music Group, which also will benefit from an Apple acquisition.
Assuming Apple seals the deal to buy Beats, Mr. Iovine will leave his longtime post as chairman of Interscope Geffen A&M records, a division of Vivendi SA’s Universal Music Group, according to a person familiar with the matter, though it isn’t clear how soon he would depart. Universal, which owns a 14% stake in Beats and would reap roughly $500 million from a $3.2 billion acquisition, is likely to let Mr. Iovine split before his contract expires early next year.
Beats Electronics is a high-profile luxury brand with its popular line of Beats by Dr. Dre headphones as well as the recently launched Beats Music streaming service. The acquisition may provide Apple with an established high-margin headphone business and could bolster the company’s presence in the music streaming arena.
Beats Electronics is one of several high-profile hires from industries outside of technology. Most recently, Apple hired Angela Ahrendts away from her role as CEO of luxury designer Burberry and placed her in charge of Apple’s retail operations. Last year, Apple also hired former Yves St Laurent CEO Paul Deneve to work on special projects for Apple CEO Tim Cook.