Apple Bought Beats for Its Future Apple TV, Says Steve Jobs' Biographer

By Mike Schuster May 20, 2014 3:08 pm

Suggested by Steve Jobs' biographer Walter Isaacson, Apple's curious $3.2 billion acquisition of Beats Electronics may be in preparation for a new Apple TV product.

The last few weeks have seen a flurry of high-priced, high-profile acquisitions. Months after Comcast (NASDAQ:CMCSA) announced a $45 billion buyout of Time Warner Cable (NYSE:TWC), Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG), and AT&T (NYSE:T) have reached into their coffers and thrown billions at everything from a satellite service provider to a video game-streaming platform.

But while Comcast and AT&T's acquisitions of cable and satellite providers make perfect sense for their business models -- and much to the detriment of their customers -- no buyout produced more furrowed brows than Apple's $3.2 billion purchase of Beats Electronics.

With Apple already being a major player in online music and sleek hardware, there appears to be little that Beats can offer Apple that it doesn't already have or couldn't easily develop in-house. As Minyanville's Michael Comeau mentioned in his recent piece, Beats' streaming music business may end up being the model for iTunes' future beyond downloadable MP3 files -- though that puts the fate of iTunes Radio into question. And Beats Music, with a mere 200,000 subscribers, pales in comparison to the tens of millions of customers already using Pandora (NYSE:P) and Spotify.

But hardware and streaming music aside, there's one theory that suggests Apple snatched up Beats for video content and the future of Apple TV. That rumor was floated by Steve Jobs' biographer, Walter Isaacson in an interview with Billboard.

Isaacson believes that Apple views Beats exec and media mogul Jimmy Iovine as an attractive asset to its content business. With his many connections to the media industry and his ability to finagle the types of deals that Apple had difficulty finalizing in the past -- mostly with Apple TV -- Iovine could jump-start the Apple TV brand after the company failed to forge partnerships with content producers and caused it to lose the spotlight to Google's dead-simple and dirt-cheap Chromecast.

Billboard's Dan Lyons writes, "Isaacson thinks the Apple-Beats deal is not about headphones or streaming music but rather is about video. He speculates that Cook wants Iovine to run Apple's content business and help Apple launch the TV product that analysts have been gossiping about for years."

Time will tell the main reason(s) why Apple bought Beats, but if it means a revamped Apple TV that could finally put the hurt on the monopolistic cable industry, we'll wonder no more.

More tech stories:

AT&T's Pricey Triple-Play Deal

Apple Bug Deletes Text Messages Sent to Android Converts

New York's Big Apple Store Turns 8 Today