Apple has confirmed the acquisition of Beats, snapping up the headphone maker and music streaming service for $3 billion.
The tech giant will pay $2.6 billion in cash and approximately $400 million in stock for Beats. As part of the deal, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple, and the iPad and iPhone maker will take on subscription streaming music service Beats Music and Beats Electronics, maker of headphones, software and speakers.
"Music is such an important part of Apple's DNA and always will be," said Eddy Cue, Apple's senior vice president of Internet Software and Services. "The addition of Beats will make our music lineup even better, from free streaming with iTunes Radio to a world-class subscription service in Beats, and of course buying music from the iTunes Store as customers have loved to do for years."
Thought to be the company's largest acquisition to date, Apple CEO Tim Cook said the deal would allow Apple to "continue to create the most innovative music products and services in the world." Despite the popularity of Apple iTunes, the firm has faced steadily increasing competition from subscription-based services such as Spotify and Pandora.
While the acquisition could breathe life in to the tech giant's music-based revenue streams, there is far to go to take on the likes of Spotify, which accounts for over 10 million subscribers -- in comparison to Beats' 111,000 subscribers.