Apple Lowers Their Bid for Beats by $200 Million

It was nearly three weeks ago that news broke that Apple was looking to acquire Beats Electronics for $3.2 billion. It’s since been reported that the number has been lowered to a flat $3 billion. The New York Post points out that recent news regarding the Beats Music streaming service only having a user-base of 111,000 might be the cause for the lower offer. Expect an official statement on the status of the acquisition to arrive within the next week, and read a pair of quotes on the matter below.

On Dr. Dre Becoming Hip Hop’s First Billionaire

While Dre boasted in a much-watched video that the sale would make him hip-hop’s first billionaire — Forbes estimated he could gross up to $800 million on a $3.2 billion sale from his 20 to 25 percent stake — a discount could make it hard to reach a 10-figure net worth.

Dre earned $275 million over the past three years, according to Forbes.

If Dre owns 25 percent of Beats and the deal goes down for $3 billion — grossing the hip-hop legend $750 million — he could fall just short, as he would have to first pay the IRS.

On Beats Music Streaming Service

Owning a streaming service is of strategic importance to Apple, which is the mainstay of music-label revenues. The Cupertino, Calif., company has seen digital downloads begin to fall as consumer tastes now bend toward renting over buying.

Whether Apple is buying the business for the hardware or the streaming music business has been the subject of much debate of late.

“Apple doesn’t have a streaming music business so it would be a nice instant get, but the hardware is the profitable business,” said one source close to the talks.