Bloomberg claims Apple is in advanced talks to buy headphone maker Beats Electronics for $3.2 billion. If the deal goes through, it will be the largest purchase in Apple's history. Analysts believe the reason why Apple would buy Beats is not because of the company's headphone lineup but for Beats Music, a new online music streaming service that gives customers unlimited access to all of the songs in the service's catalog for $10 per month.
“They are buying into the future and the future is going to be streaming and subscription,” said Jon Irwin, the former president of rival music service Rhapsody International Inc. “Revenue from streaming and subscription is growing. Files and downloads are shrinking. Everyone has to engage in streaming and subscription.”
Apple took a step in that direction last year, introducing iTunes Radio, which is an advertising-supported music streaming service that competes with Pandora. ITunes remains the world’s largest seller of music, but is only for downloads of single tracks and albums.