Apple buys Beats and plans home-
control system to rival Nest

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Beats by Dr Dre headphones

News: tech giant Apple has bought Dr Dre's Beats headphone company for $3 billion in the same week that details emerged of a project that will turn users' iPhones into remote control devices for their homes.

Apple has finally confirmed its deal to acquire Beats, with its founders – producer and entrepreneur Dr Dre and record industry executive Jimmy Iovine – joining the tech company as part of the agreement.

The Financial Times initially reported that the two companies were in talks three weeks ago, triggering widespread speculation about Apple's move back into the music business.

Industry insiders suggested that Apple was more interested in developing the streaming service that Beats has been working on than its headphone products – a theory that appeared to receive confirmation in comments from Apple CEO Tim Cook.

"[With Beats] we get a subscription music service that we believe is the first subscription service that really got it right," Cook told tech site Re/Code. "They had the insight early on to know how important human curation is. That technology by itself wasn't enough — that it was the marriage of the two that would really be great and produce a feeling in people that we want to produce."

"We always are future-focused," he added. "So it's not what Apple and Beats are doing today. It's what we believe pairing the two together can produce for the future."

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In recent years Apple's iTunes, which acts as both an online store for digital music downloads and a mobile media library, has been fighting off growing competition from music streaming services like Spotify.

In its latest digital music report, the International Federation of the Phonographic Industry (IFPI) found that revenue from music streaming services had grow by more than 50 per cent in the last year, while revenues from downloads fell by just over two per cent. It reported that there were 28 million individual users of subscription streaming services in 2013.

Earlier this week, the Financial Times also reported that the tech company was working on a system to turn users' iPhones into remote devices to control the heating, air conditioning, lighting, security systems and other appliances in their homes.

Described as a "Jetsons-style" home-automation system, the project was due to be unveiled at Apple's Worldwide Developer Conference in San Francisco on June 2, according to the FT.

It is being viewed as a rival to Google's Nest – the home climate system bought by the search giant in its January acquisition of Nest Labs for $3.2 billion – and Samsung's recently revealed Smart Home collection, which includes connected fridges, washing machines and TVs that can be controlled via a smart watch.

"Apple has been talking to a select group of other device makers whose smart home products will be certified to work with its forthcoming new system and then be sold in its retail stores," said the FT.

Late last year, Apple's patent claim on "a system and method of determining location of wireless communication devices/persons for controlling/adjusting operation of devices based on the location" was published online.