Why would Apple buy Beats?

Dr. Drew and Monster have built quite a headphone empire with their Beats product, but in all reality, is that really what Apple is after?  Take into account that Apple sells Beats headphones in each of their stores, and already has a firm grasp on the financials of the business.  So why buy Monster’s Beats division for roughly $3 billion?

The answer is less clear than one may think.  While the headphone business is extremely lucrative, Apple is first and foremost concerned with cornering the music market.  As Beats Music has rolled out, the subscription based service has seen solid success.  With the iTunes store being arguably the largest player in the music streaming space, cutting out competition only makes sense.

With the differentiating tools that Beats Music has deployed, it has set itself apart from the likes of Spotify and the competition.  Apple can apply some small tweaks to the service, streamline it, and have a shot at completely cutting out the middleman in the music distribution space.

This deal would put Apple in an extremely lucrative position, both from the tangible goods and the streaming aspects of the game.  As the deal is reportedly coming close to being finalized, only time will tell how things shake out.

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