12 May 2014

Apple to buy big headphone business

7:13 am on 12 May 2014

Apple is tipped to buy Beats Electronic, a headphone and music streaming business, from rap artist Dr Dre for $US3.2 billion.

Beats headphones.

Beats headphones. Photo: Getty Images / AFP

Beats is best known for its big, brash, brightly coloured headphones, which are worn with by NBA basketball players, Premier League footballers and affluent young commuters.

If the deal to buy Beats Electronic goes through, it would be Apple's biggest acquistion and create hip hop's first ever billionaire.

Manatt Digital Media Ventures chief executive Peter Csathy said Apple, which already owns iTunes, needs to bolster its online music offering.

Financial Times technology expert Jonathan Margolis said Apple will reach a new demographic other than its white, hipster, arty, media crowd.

Some analysts have also questioned whether Beats, which was valued at $US1 billion in September, is worth that price.

Apple shares fell slightly in trading on Friday.