An Apple veteran will take over the Beats headphones business

Apple is changing leaders at Beats, the premium headphone and earphone maker it acquired in 2014 for $3 billion. Longtime president Luke Wood is exiting and veteran Apple exec Oliver Schusser, who heads up Apple Music and International Content, is taking over at the end of this month.

Apple hasn't publicly announced the leadership change, but Eddy Cue, Apple's senior vice president of Internet Software and Services, told Apple employees about the transition via email in recent weeks. A Beats spokesperson confirmed to CNET that Schusser will lead Beats after Wood's departure on April 30. Schusser will also continue to run Apple Music and International Content, reporting to Cue. The consolidation is a homecoming of sorts for Apple Music, which was built on the backbone of the earlier Beats Music streaming service.

The move has been in the works for a while, Cue said in his note to employees: "In the last year, Luke Wood told me about his desire to do something new. I appreciated the heads up so that it allowed us to plan for this transition."

Read more: Best noise-canceling headphones of 2020

Though Wood wasn't a founder of Beats -- the company was started in 2006 by Dr. Dre and Jimmy Iovine -- he was involved with the company since its early days, officially joining in 2011. (Iovine retired from Apple in 2018, according to The New York Times.) Meanwhile, Schusser has been with Apple for over 15 years, building up Apple's international content operations before also taking the reins at Apple Music. Cue noted that "Since taking on the Apple Music business a little over a year ago, Apple Music has achieved steady growth under Oliver's leadership. He's passionate about music and the Beats brand. He's equally passionate about building a strong, collaborative culture with his team."

Cue wrote that he was sensitive to making a management change in the middle of the coronavirus pandemic, remarking that "the timing of the announcement isn't ideal." However, the best thing for Beats is "to keep the business moving forward," he said, affirming that Apple remains "committed to the Beats brand and the importance of maintaining its role firmly in the music portfolio." 

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Schusser takes over as Apple and Beats work around a unique dynamic. The headphone maker has released eight new products since joining Apple, many of which cost north of $200 (Cue called them "world-class products that have completely transformed the Beats portfolio"). But in that time, Apple has jumped into the headphone fray under its own brand, fundamentally changing the audio industry with its focus on true wireless headphones. Much like other hit products, such as the iPhone or iPad, the company's AirPods and AirPods Pro weren't the first in the category, but they're easily the most successful. According to Strategy Analytics, nearly 60 million AirPods were sold in 2019, accounting for 50 percent of sales in the wireless headphone market.

Collaborating with Apple's engineering team, Beats last year had a hit with its Powerbeats Pro, a sportier version of the AirPods that offer better sound, longer battery life and a more secure fit for many users. And just a few weeks ago, Beats released the fourth-generation Powerbeats, which are essentially the Powerbeats Pro with a cord between them.

Apple doesn't break out sales of its headphones, including them in a category called Wearables, Home and Accessories in its earnings report for the quarter that wrapped up at the end of December 2019. But that category, which also includes the Apple Watch, had sales of $10 billion in that quarter, the first of 2020, making it the third biggest category for revenue behind the top moneymaker, the iPhone, and services, which include everything from Apple Music to Apple's cut from app sales. 

Apple may be expanding its headphone business beyond earbuds. There are rumors that the company is moving closer to releasing a premium, over-ear noise-canceling headphone to compete with popular models from Bose, Sony and even Beats' 2-year-old Studio3 Wireless. Bloomberg reported earlier this week that Apple is working on two variations of full-size noise-canceling headphones -- a premium and a sports version -- that'll have easily removable ear pads users can replace with a variety of styles, similar to swapping bands on Apple Watch models.