Apple is officially buying Beats Electronics for $3 billion Beats was founded by rapper and hip-hop producer Andre Young, who better known by his stage name of Dr Dre, and Jimmy Iovine, who is also the chairman of Interscope-Geffen-A&M Records.

In March, iTunes accounted for only 8 percent of the market, despite being a preloaded system app on all iPhones, iPads and iPods in the US and Australia. In contrast, Pandora had cornered 31 percent of the market. iTunes Radio was third behind iHeartRadio, but ahead of Spotify.

Beats Music, on the other hand, is unlike Pandora or iTunes Radio, in that it’s an on-demand service like Spotify and there are no skip limits.

Apple said iTunes, which sells individual songs and albums and offers a streaming radio service, would be offered alongside the Beats music service.

                                             

The sale terms include two Beats company in the deal - subscription streaming music service Beats Music, and Beats Electronics, which makes the popular Beats headphones, speakers and audio software. As part of the acquisition, Beats co-founders Jimmy Iovine and Dr. Dre will join Apple.

The company initially produced headphones that delivered improved sound quality over Apple's popular earbuds.