The Tech Bet

Beats buy adds products, 'cool factor' to Apple

Tech Yeah! How consumers will benefit from Apple's Beats buy

Apple is acquiring much more than a headphones company when it seals its $3 billion deal to buy Beats.

Along with Beats headphones, Apple will be able to take advantage of the celebrity appeal of rapper Dr. Dre and music and film producer Jimmy Iovine, as well as a relatively new streaming music service, Beats Music, which could give Apple a boost amid the serious competition that iTunes has been facing against streaming music subscription services such as Spotify, Pandora and Rdio.

"This is something that I think is going to really show that Apple is really trying to take a more innovative approach and also be more culturally relevant, and I think that's very, very important at this stage in Apple's game to be more culturally relevant as a company and as a brand," said Mario Armstrong, a digital lifestyle expert and contributor on the TODAY Show.

Beats headphones are sold along side iPods in an Apple store on May 9, 2014 in New York City.
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Armstrong said Apple is buying Beats' talent and technology, which will ultimately add to Apple's product lineup, but there are plenty of detractors who say the deal is a risky wager.

"This is a $3 billion bet that Jimmy Iovine is going to be able to join Apple and create a Spotify-killer," said Founders Fund Partner Geoff Lewis, on CNBC's "Squawk Box," adding that the deal is a "long-shot, sort of ballsy acquisition."

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"While Apple has two key technologies in place, iTunes Match to get your entire iTunes collection on your iPhone or iPad, and iTunes Radio, which is basically a Pandora alternative, they don't have a compelling answer to services like Spotify and Rdio, which offer huge catalogs of music on-demand," Armstrong said.

But Apple's $3 billion "bet" is one that the tech giant can afford, suggests Gene Urcan, mergers and acquisitions analyst at the Capello Group, a boutique investment bank.

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"At $3 billion, the amount paid is a drop in the bucket to the approximately $40 billion in cash they have on their balance sheet," noted Urcan, who said that Apple not only gains headphones, a music service and two music industry icons, but Beats adds a cool factor that will help grow Apple's customer base.

—By CNBC's Althea Chang.