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Apple may change Beats brand as it spins up music service

There are conflicting reports about what Apple will ultimately do with Beats Music, with Recode reporting a potential name change, and TechCrunch calling for the service to be scrapped completely. Apple says TechCrunch's report is inaccurate.

Apple's Beats Music service may be in for a shake up.

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Apple bought Beats for $3 billion earlier this year. Apple CEO Tim Cook (second from left) is flanked by Beats cofounders Jimmy Iovine and Dr. Dre, with iTunes chief Eddy Cue (far right). Apple

There are conflicting reports about what exactly will happen with Beats Music. The $10-a-month subscription streaming music service was acquired when Apple bought Beats for $3 billion. The service could be scrapped entirely, according to TechCrunch. Or the service could continue with its name slowly phased out, according to Recode.

An Apple spokesman told CNET that the TechCrunch report that Apple will be scrapping the Beats streaming music service is "absolutely not true."

It's more likely, as Recode points out, that the streaming service could lose the Beats Music name, perhaps taking on the much more well-known iTunes brand and becoming integrated with Apple's overall iTunes package.

"I was going to be a bit surprised if they kept it and left it unchanged," said Jackdaw Research analyst Jan Dawson, who said he always assumed Beats Music would adopt the Apple and iTunes branding.

That there's confusion about the ultimate fate of Beats Music underscores the questions and uncertainty raised when Apple first acquired the company. Beats Music is a paid service that is somewhat similar to Apple's own iTunes Radio streaming music service (which is free and ad-based). Beats' main business is its popular line of stereo headphones.

The TechCrunch report notes that the new iPhones didn't ship with a Beats Music app pre-installed, but last week's update to Apple TV added a Beats Music app for the first time.

Beats Music is a relative newcomer to the streaming music business, having launched in January with AT&T as its main carrier partner. Beyond iTunes Radio, which launched last year, it also faces entrenched players in Spotify, Pandora, and Rhapsody.

When Apple closed its takeover of Beats in August, it also installed the head of Beats' music service -- Ian C. Rogers -- as the leader of iTunes Radio. At the time, a person familiar with the matter said the two services would pool expertise and resources but would remain separate services, at least for a short while.

Apple also eliminated about 200 of Beats' 700 full-time positions, a person familiar with the matter said in August. The cuts largely come from human resources, finance, and other positions that overlap with current Apple workers, the person said. The people in eliminated positions have time to find other jobs within Apple, and some been given support for up to a year to find other jobs.

Apple launched iTunes Radio with fanfare in September of last year as its arrival to the streaming-music scene. Streaming music, while still a small part of the bigger recorded music industry, is growing rapidly. Global revenue from subscription and streaming services increased 51 percent to top $1 billion for the first time last year.

Though iTunes Radio notched 20 million users listening in to a billion songs in its first five weeks, the service has dropped off the radar since. Its prime competitor, Pandora, didn't see much difference in its audience growth in the months after Apple rolled out iTunes Radio. Other streaming services have also made splashy entrances to divert attention away, like Amazon Prime Music in June and, of course, Beats Music in January.

The addition of Beats Music to the Apple family was an about face for a company that for years dismissed a subscription model of payment for entertainment. Beats Music provides all-you-can-eat access to a catalog of 20 million songs for about $10 a month.

Dawson said there were likely parts of iTunes and Beats Music that were redundant, and that Apple could shut down elements of Beats Music without tampering with the core of the service. Apple could make a splash at its rumored October event, he said.

"That would be a good opportunity for them," he said. "There's no reason they couldn't resurrect that old theme of iTunes launches in the fall."

Updated at 4:15 p.m. PT with comment from Apple and background information.