After news broke Thursday that Apple Inc. (NASDAQ:AAPL) was in talks to acquire Beats Electronics, a producer of audio products and equipment headquartered in Santa Monica, Calif., a new report said Beats Electronics' cofounder and CEO, Jimmy Iovine, was in talks to join the Cupertino tech giant as a “special adviser” to CEO Tim Cook.
Iovine, who is also the chairman of Universal Music Group’s Interscope, Geffen and A&M labels, is said to currently advise Cook on “creative matters, but the responsibilities of rumored advisory position are still unclear, the New York Post reported, citing two sources familiar with the matter.
The news came after the Financial Times reported on Thursday that Apple was negotiating a $3.2 billion deal to buy Beats Electronics and planned to make an announcement about the acquisition sometime next week. While it is still not yet known what kind of role Iovine would have at Apple, rumors suggest that the music mogul could be brought in as a so-called “acqui-hire,” if the buyout does takes place, AppleInsider reported.
Although it is unclear why Apple would need Iovine on its payroll, rumors suggest that Apple could use his strong contacts in the music industry for potential future negotiations with music labels, MacRumors reported.
According to a report from Forbes, Beats holds patents on certain software technology that might have interested Apple. Beats also operates a subscription streaming music service, which could help Apple make improvements to its iTunes service.
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In addition, integrating the Beats technology with iTunes could also generate an entirely new list of subscribers for the Apple service, which now has more than 800 million accounts.
“This is really puzzling,” James McQuivey, an analyst at Forrester, told Reuters. “You buy companies today to get technologies that no one else … or customers that no one has.”
In September, Beats Electronics received a $500 million investment from the Carlyle Group, valuing the company at more than $1 billion.