Apple set to acquire Beats in $3.2 billion deal

Apple is reportedly finalizing a deal to acquire Beats Electronics for a whopping $3.2 billion.

The deal will supposedly be announced next week, according to the Financial Times, who first reported news of the rumored acquisition. If true, the deal would be the largest acquisition in Apple’s history. It would also mark a huge change in strategy for Apple, which has traditionally stayed away from high-dollar acquisitions.

It is being seen as move by Apple to get a stronger foothold in the phone and music accessories business and bolster its online music offerings.

The two areas are expected to see fast growth in the coming years.

Beats was founded by music producer Jimmy Iovine and the hip-hop star Dr Dre and until recently was best known for its headphones.

It started a subscription-based music streaming service earlier this year.

However, Apple already has its own iTunes store which is the world's largest music download service. It also launched iTunes Radio last year.

That has made some industry watchers question the move.

James McQuivey, an analyst with Forrester, said there was a big overlap of customers between the two firms.

"This is really puzzling," he said. "You buy companies today to get technologies that no one else or customers that no one has.

"They must have something hidden under the hood."

The reported price is also a huge premium on Beats's previous valuation.

Beats was valued at just $1bn after its last funding round in September, which saw it get a $500m investment from the Carlyle Group.