Apple is closing in on a deal to buy headphone manufacturer Beats Electronics for $3.2bn (£1.88bn), it has been reported. It would be the California company's largest ever acquisition.
The deal could be announced as early as next week and would include Beats' streaming music service and its audio equipment business.
Beats has developed a strong brand since its launch by rapper Dr Dre and music producer Jimmy Iovine in 2008.
In 2012 50.1% of the company cost HTC $309m. Last September a $500m investment from Carlyle valued the company at more than $1bn.
The Apple deal, news of which was first reported by the FT on Thursday night, would mark a change in the California firm's approach under the leadership of chief executive Tim Cook following the reluctance of Steve Jobs to make large acquisitions. Reporting the company's second-quarter earnings last month, Cook said he was "on the prowl" for companies to buy. He told journalists: "We are not in a race to spend the most or acquire the most. We're in a race to make the best products that enrich people's lives." He added that Apple has purchased 24 companies over the past 18 months.
He said the company does not have a rule on the price it will pay: "We'll spend what we think is a fair price."
"In terms of acquisitions, Apple has been very, very light in their activity," Richard Lane, an analyst at Moody's, told the FT. He added: "I don't think they've spent $1bn in any of the last four years."
The news follows major acquisitions – and attempted purchases –by Apple's tech rivals. Google bought smart home developer Nest Labs for $3.2bn and Facebook bought the WhatsApp Messenger service for $19bn.
Beats recently launched a streaming music service, which may have proven particularly attractive to Apple, the popularity of whose iTunes service appears to be falling. In contrast, subscription services are growing fast, with revenues increasing 50% to $1.1bn in 2013, according to a report by the the global music industry association IFPI. Downloads, however, fell 2% to $3.93bn.
