In 2006, record industry moguls Jimmy Iovine and Dr. Dre teamed up to create a new kind of audio empire: a headphone brand. Over the years, their company Beats Electronics built up its quality, its reputation, and its fan base largely thanks to its adoption by a huge number of athletes and celebrities. After bursting onto the scene during the 2008 Summer Olympic Games on the dome of LeBron James, Beats (formerly “Beats by Dre”) headphones became “the most iconic alternative to Apple’s white earbud.” Despite vocal opposition from audiophiles, by 2012, Beats had garnered a dedicated following of headphone-wearing music lovers. The company eventually extended into the software sphere with its own app, Beats Music. Apple then acquired Beats in 2014. Four years later, Beats’ original leadership team has moved on as Apple has swallowed the Beats brand.
The Wall Street Journal reported Wednesday that Iovine will leave Apple in August and transition into a role as a consultant. He follows former Beats executives Dr. Dre, Ian Rogers, and Trent Reznor, who had already left the company since Apple’s $3 billion acquisition. While the timing of Iovine’s departure makes sense—August is when his stock fully vests, and he just turned 65—his leaving is a significant marker of where Beats’ status lies today.
Apple didn’t need Beats back in 2014, but the acquisition made sense. It gave Apple control of a buzzworthy app, Beats Music, and the ability to weave its smarts into Apple’s own music software; a popular and well-regarded headphone business with an iconic look; and access to a slew of the company’s audio engineers. While Beats has still introduced new products since the acquisition, it’s clear that those first and last points were the impetus behind Apple’s interest.
When Apple acquired Beats, the headphone-maker was reportedly working on its own early smart speaker, a Wi-Fi–connected competitor to Sonos. Apple quashed that project. As Variety wrote in 2015, “The product was supposed to be introduced in time for the holidays last year, but was effectively killed post acquisition. Some of the engineers working on the project have since left the company, while others have been shuffled to other projects.” One of those projects was likely Apple’s smart home speaker, HomePod, which debuted in February but began development in 2012.
In November 2015, Apple killed Beats Music, the company’s curation-focused streaming music player, after integrating some of its core features into Apple Music. This move was entirely expected: At the time of Beats’ acquisition, Apple already had a robust music software platform in iTunes and a burgeoning streaming service in iTunes Radio, which, combined with Beats, would evolve into what we now know as Apple Music. After Apple launched the Apple Music app that June, it was only a matter of time before Beats Music would disappear from the App Store. It had become redundant.
Outwardly, Apple hasn’t messed with Beats’ core headphone brand—it’s still alive and kicking, offering headphones, earbuds, and speakers on its website and in Apple Stores. There have been new models, such as the Beats Studio 3 and Powerbeats Wireless headphones, including some with the same wireless technology as Apple’s wireless AirPods. But in the same way Apple held onto the iPod for years after the iPhone proved the superior mobile sidekick, Beats headphones seem like the past-friendly alternative to AirPods, the audio accessory of the future.
Beats executives likely knew this would be the case when they accepted the acquisition—that Beats would become a shadow of its former self, with its resources, talent, and ideas redistributed throughout Apple’s vast corporate village. That’s what typically happens in these kinds of acquisitions. Now that Iovine and the rest of Beats’ core executives will be gone (with the exception of Beats President Luke Wood, who still oversees its headphone business), it feels like the end of an era. Unlike your typical billion-dollar tech acquisition—for example, Google’s 2014 acquisition of Nest—names like Iovine, Dre, and Reznor were synonymous with Beats and the celebrity caché it advertised. While the Beats brand and its headphones may not disappear, Apple is completely at the helm now. So far, this corporate entity has successfully carried on the coolness and style that Beats’ founders established in their products, but we’ll see if it can continue that legacy without their day-to-day input.
