Apple may have spent $3 billion just to hire Jimmy Iovine

Jimmy IovineCharley Gallay/Getty Images for LACMARecord producer Jimmy Iovine.

Apple’s $US3 billion (£1.95 billion) acquisition of headphone manufacturer Beats might not have been about headphones at all.

Bloomberg is reporting that an anonymous source with knowledge of the deal claims that the Apple/Beats deal was just about one man: Jimmy Iovine.

Iovine is a veteran record producer who has worked with some of the biggest names in music, including John Lennon, Stevie Nicks, Bruce Springsteen, and U2.

But Iovine isn’t just known for his record-producing skills. He also has a detailed knowledge of the music industry, and is one of the most forward-thinking executives around.

50 cent jimmy iovineKevin Winter/Getty50 Cent and Interscope Records founder Jimmy Iovine in 2005.

Iovine founded Interscope records in 1989, and immediately recognised the growing audience for rap music in the US. He helped shape the careers of rappers such as Dr. Dre and Eminem, as well as pop acts Lady Gaga and Madonna.

It’s clear why Apple would want Iovine on board. The Apple Music streaming service relies on support from big-name artists, and Iovine is one of the most connected men in the music industry. But it’s not just his contact book that’s important: he also understands how the industry changes and where music tastes are going. That’s extremely valuable for Apple, not just in Apple Music, but for iTunes and any other music projects that it has planned in the future.

It might not be completely accurate to say that the Beats deal was only about Iovine, though. Even if Iovine was Apple’s main target, it still got a music streaming service (Beats Music), a line of headphones, and musicians Trent Reznor and Dr. Dre from the deal. Not bad for $US3 billion.

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