Apple To Buy Beats For $3 Bln.

(RTTNews) - Apple Inc. (AAPL) Wednesday said it has agreed to buy high-end headphone maker and music-streaming service Beats Electronics LLC for $3 billion, as the iPhone maker seeks to spur its slowing growth.

Beats co-founders-- hip-hop artist Dr. Dre and music-industry executive Jimmy Iovine- will join Apple, the Cupertino, California-based company said. Apple indicated the purchase price at $2.6 billion with another $400 million that will vest over time. Apple expects to close the deal in the fourth quarter, subject to customary closing conditions.

"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," said Tim Cook, Apple's CEO.

"I've always known in my heart that Beats belonged with Apple," said Jimmy Iovine.

Santa Monica, California-based Beats Electronics recently launched a new subscription-based online music service known as Beats Music. For a monthly fees of $10, subscribers gain unlimited access to all of the songs in the service's catalog. The acquisition of Beats Music will help Apple to expand in the internet music streaming market, dominated by YouTube, Spotify and Pandora. Apple launched its own music-streaming service, iTunes Radio, in September last year.

At Apple's iTunes Store, the biggest music retailer in the world, digital download sales are said to have declined for the first time recently as people increasingly turn to streaming music services.

This deal is Apple's largest-ever acquisition as CEO Tim Cook takes a different path from his predecessor Steve Jobs. The previous largest deal to date by Apple was the acquisition of NeXT Software Inc. for $400 million in 1997, which brought Jobs back to Apple. Cook expects to ignite the slowing sales of iPhone and iPads through acquisitions with the help of the huge horde of cash the technology giant sits on.

Apple will also gain control of the Beats headphone devices, which are priced in a range from $170 to as much as $450. Beats primarily makes products under the brand "Beats by Dr. Dre."

AAPL closed Wednesday's trading at $624.01, down $1.62 or 0.26%, on the Nasdaq. The stock, however, gained $0.32 or 0.05% in after-hours trade.