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Tech Industry: Apple to grow streaming with Beats' formula

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Tech Industry: Apple to grow streaming with Beats' formula

2:54 /

Beats Music may hold the key to help Apple take on Spotify and other music streaming services. CNET's Bridget Carey breaks down the $3 billion deal to buy Beats and what Apple may announce next week at WWDC.

It's official, Dr. Dre is an Apple employee. I'm Bridget Carey, and this is your CNET Update. Apple and Beats will be making music together. Apple announced that it paid $3 billion to own Beats, and with it, Apple gets the secret sauce to the new streaming service, Beats Music. It seems that streaming music is the core reason Apple purchased Beats. With the deal, Apple also owns the popular headphone brand, but Beats are not exactly the best headphones out there. The streaming music, however, that's an area Apple needs to beef up. You have Spotify, Songs, and Pandora all growing in popularity. Apple does have its own iTunes radio that lets you stream music for free, but it's not at the level of Spotify. There are 10 million people that pay $10 a month to use Spotify. Beats Music also costs $10 a month, but it's only four months old and it's much smaller. But the formula of Beats makes it unique. You see, Beats uses computer algorithms to pick songs that you like. But on top of that, there are humans behind the scenes picking playlists. There are two other gems that Apple gets out of this deal, Dr Dre and Jimmy Iovine. The co-founders of Beats are now Apple employees. Having them around could give Apple fresh perspectives on digital music. Jimmy Iovine is a famous record producer and a man with many connections in the industry. He is good to have on your team if you're creating music products. There's so much to be seen on how these two brands will commingle. For now, nothing's changing with Beats headphones, and nothing's changing with the Beats music apps on Android and Windows Phone, which is kinda funny because this means for the first time Apple will run apps that you can download outside of iTunes. Streaming music isn't the only focus for Apple. Next week is WWDC, and that's Apple's big conference for developers. There's a two hour keynote presentation on Monday. That's when Apple's gonna introduce new products. Chances are, it's gonna be mostly about software. So you'll hear about the new operating systems, like iOS8 and an update to OS10 for Mac. We're also expecting to hear about Health Book, which is some sort of mobile app for keeping track of your health and fitness data in one place. There have been reports Apple's also working on a way to control your smart home appliances, such as the lights and the thermostat. We heard Apple will not be showing off new hardware. So don't expect to see an iWatch. But you never know. Apple could always surprise us. Apple is streaming their presentation story at 10 a.m. Pacific, 1 p.m. Eastern, on Monday. And you can follow the news on CNET's live blog with our editor commentary. That's your tech news update. You can always head to cnet.com for more. From our studios in New York, I'm Bridget Carey.

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