Apple's reported deal for Beats Electronics is more than about headphones, analysts told CNBC, as the technology giant looks to become a major contender in the rapidly expanding music-streaming space.
The Cupertino, Calif.-based company is in talks to purchase Beats Electronics, the company started by rap icon Dr. Dre, for $3.2 billion, according to a report in the Financial Times.
Beats Electronics is famed for its premium headphones, a market worth over $1 billion, but the company recently launched Beats Music, a streaming service.
"This is not about acquiring expensive plastic headphones," Brian Blair, analyst at Rosenblatt Securities said Friday on CNBC's "Squawk Box."
"The only reason the story has any teeth is because Apple does need to do something about its iTunes platform. Digital downloads have been in decline for the last couple of years. Nobody's downloading music anymore, everybody streams it," said Blair.
Music listeners are moving away from downloading. Digital music sales fell in 2013 for the first time since iTunes' launch a decade ago, data from Nielsen SoundScan showed.