Beats Electronics is one of the biggest headphone brands in the world. While not everyone loves their style, the fact is that they offer a great design and good sound quality for the majority of listeners who aren’t audiophiles.
Being such a massive headphone company, it makes sense that it would generate a ton of cash — but you might not know just how much cash. And, the founders of the company got a pretty hefty slice of that cash — Dr. Dre’s net worth spiked to a massive $700 million after the sale of the company to Apple.
Here’s a brief history of Beats headphones, along with just how much green the likes of Dr. Dre have made from it.
Beats was created in 2006 in an attempt to fix a few problems in the music industry — the impact piracy was having on record sales, and the fact that most people were listening to music on Apple earbuds that left a little to be desired.
The idea was formed when legendary music producer Jimmy Iovine happened to run into Dr. Dre, who at the time was considering whether or not he should start selling sneakers. Iovine, however, suggested that instead Dr. Dre should be selling speakers — not sneakers.
Soon after coming up with the name Beats, the pair partnered with Monster Cable, a manufacturer based in Brisbane, California, to develop and manufacture the first Beats headphones — which were called “Beats by Dr. Dre Studio” headphones. They were released in 2008.
After a few years of building excitement, a few companies began getting more interested in Beats — namely HTC, which acquired a 50.1 percent majority stake in the company for $309 million. At the time, HTC wanted to better compete with other smartphone manufacturers, and it thought that associating itself with the Beats brand would help it do so, as it allowed the company to build phones with Beats branding on them.
After not renewing the deal with Monster cable, Beats decided to oversee all operations of the company, including R&D and manufacturing. Soon after, in 2012, the company launched its first two self-developed products: the Beats Executive headphones, and the Beats Pill speaker.
In July 2012, however, HTC sold half of its stake in Beats back to the company for $150 million — though it remained the largest shareholder with a 25.1 percent stake. The next year, HTC sold its remaining stake in the company for another $265 million.
In January 2014, Beats launched its own music streaming service, Beats Music — a subscription service aimed at taking on the likes of Spotify.
Beats by Apple
Perhaps the most important deal in Beats’ history came in May 2014, when it was reported that Apple was considering buying Beats for a massive $3.2 billion — representing the largest purchase Apple had made to date. In the end, the deal was made for $3 billion — and some speculate that the lowered amount was due to lower than expected subscribers to Beats Music.
Of course, the founders of the company got a pretty substantial pay-day thanks to the sale. After the deal, Dr. Dre’s estimated net worth spiked to a whopping $700 million, making him one of the richest figures in hip hop.
One thing’s for sure — Beats is most likely to remain a part of Apple for the rest of its existence. Some have speculated that Apple could use Beats personnel to sell headphones under the Apple name, doing away with the Beats name altogether. For now, however, we’re likely to continue to see Beats headphones show up, only getting better and better.