Cook calls Apple/Beats deal a no-brainer, Iovine and Dr. Dre to report to Eddy Cue

May 29, 2014

More information is becoming available following the announcement of Apple buying Beats for $3 billion, including Tim Cook calling the deal a no-brainer, and word that both Jimmy Iovine and Dr. Dre will be reporting to senior vice president of services, Eddy Cue. The New York Times:

In an interview here at Apple's headquarters, Timothy D. Cook, Apple's chief executive, repeatedly emphasized the talent that Dr. Dre and Mr. Iovine would bring to Apple. He also praised the Beats music service, which has people create playlists for people to listen to.

"These guys are really unique," Mr. Cook said. "It's like finding the precise grain of sand on the beach. They're rare and very hard to find."

The Wall Street Journal said Iovine will leave his job as Chairman of Vivendi's Interscope Records to work full time for Apple. Dre will continue to produce music as well as work for Apple. Both will spend as much time at Apple's Cupertino headquarters as necessary.

"The ugly truth is that there is such a Berlin Wall between Silicon Valley and L.A.," Mr. Cook said in an interview. "The two don't respect each other, don't understand each other.

"We think these guys have a very rare talent," Mr. Cook continued. "We love the subscription service that they built—we think it's the first one that really got it right."

Re/code interviewed Tim Cook:

But mostly, backing up — it's because we always are future-focused. So it's not what Apple and Beats are doing today. It's what we believe pairing the two together can produce for the future.

Financially, it's great, because even in the short term there are synergies. Using Apple's global footprint, there's hitting the gas on the subscription service, there's distributing the headphones globally in countries that they're not in today. There's lots of things like that.

So we're projecting it's going to be accretive in fiscal year 2015, which as you know for us, only starts in a few months.

But the real thing that gets us excited is that feeling that you only get so few times, are the things that we can jointly do together, that neither company could do on their own.

Cook also admitted that, while Apple could certainly have built a Beats-like business themselves, getting Iovine and Dre, and getting a head-start by not having to build it themselves, was valuable.

It's official but that doesn't mean we'll know the extent of Apple's plans for the Beats brand, hardware, or services for a while yet.

What do you think they should do?