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Apple, Beats ready to make music

Players get together to laud $3-B deal

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Jimmy Iovine (from left), Tim Cook, Dr. Dre and Eddy Cue at Apple headquarters in Cupertino, Calif., Wednesday.

PAUL SAKUMA / APPLE Enlarge Image

Jimmy Iovine (from left), Tim Cook, Dr. Dre and Eddy Cue at Apple headquarters in Cupertino, Calif., Wednesday.

RANCHO PALOS VERDES, Calif. -- Just hours after officially announcing its $3-billion deal to buy Beats, Apple exec Eddy Cue and Beats co-founder Jimmy Iovine talked up their plans to make music together.

Iovine said he quit his job at Interscope and retired as a record executive to join Apple full-time. He won't relocate to Apple headquarters in Cupertino, Calif., but said he would spend a lot of time there.

The two appeared on stage in their first public interview at the inaugural Code conference in Rancho Palos Verdes, Calif.

Apple is hoping the blockbuster deal will re-energize its music business.

Some have said the deal is a head scratcher. But Cue called it a "no brainer."

He distilled the reasoning into three buckets: the talent at Beats, the quality of its headphones and the Beats Music streaming service.

"It's not about what Apple is doing today or what Beats is doing today, but what we're going to do together," Cue said.

Apple seems to be banking on Iovine's four decades of experience in the music business, his track record of spotting the next big thing and his credibility with artists.

He and Dre will report to Cue, Apple's senior vice-president of Internet software and services, and marketing chief Phil Schiller.

Their new titles at Apple are simply Jimmy and Dre.

The Beats music-streaming service has grown to 250,000 subscribers after three months. It will continue to operate independently, Cue said.

Cue talked up Iovine's "ear" for music and the service's curated playlists. Iovine did, too.

Without a curated play list, he said, "there is no emotion." He says consumers will pay for that kind of experience.

Cue admitted growth in music sales has "levelled off." But, he said, the notion music sales are going away "is way overrated." He noted Apple passed 35 billion songs sold last week.

But why couldn't Apple do its own streaming service?

"We don't do everything," Cue said.

"We do a few things and try to be the best at them in the world."

Beats will also continue to make headphones, even though reviews have been mixed.

The only headphones Apple makes are its ubiquitous earbuds, which Iovine said exist only "to see if the machine works."

Said Cue: "Jimmy will tell you, we make the best headphones that come in the box."

Cue confirmed Apple is continuing to try to improve the TV experience, which Cue says "sucks" and has "a long way to go."

But, said Cue, the fix is "complicated."

He did lavish praise on Comcast CEO Brian Roberts, calling him "the best" and saying he himself is a Comcast subscriber. Apple is reportedly in talks with Comcast about a potential streaming TV service on Apple TV.

Cue denied Apple is in "reset" mode after the death of co-founder Steve Jobs, but conceded the company was in a "transition."

He also made a bold statement that may set up oversized expectations among consumers and investors.

"We've got the best product pipeline that I've seen in my 25 years at Apple," Cue said.

Stay tuned.

-- USA Today

Republished from the Winnipeg Free Press print edition May 30, 2014 B10

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