here he is speaking with beats cofounder jimmy iovine at the code conference. >> later this year, we have the best product pipeline that i've seen at apple in my 25 years. >> the best product pipeline you've seen in 25 years? including the iphone? >> i get to see it tomorrow. i've been out here for two months. i'm not kidding. >> that's a really strong statement you made, you think for the rest of this year you have the best product pipeline you've seen in 25 years. in 25 years, you did the imac, the ipod, the iphone, the ipad, the macbook air. they are widely recognized as pretty good products. >> i agree with you. i certainly believe the products we have coming are great. >> the appearance was just hours after apple struck a deal to buy beat electronics for $3 billion. tim cook posted a photo of him sharing a laugh with iovine and dr. dre. brad stone and cory johnson as well as the ceo of mine at digital media ventures, i started by asking if it could really be bigger than the ipod, the iphone, and the ipad. take a listen. >> you know, apple is famous for their spin and the reality

dre and jimmy iovine will be joining apple. in a statement announcing the deal, tim cook said music is such an important part of all of our lives and hold a special place in our hearts apple. that is why we have kept investing in music and we bring together these extraordinary teams to continue to create the most innovative music products in the world. how will the beats deal improve apple's business? joining me now, editor-at-large cory johnson, west coast correspondent jon erlichman and senior analyst with jmp security. thank you for joining us. who wins here -- apple or beats? >> i don't think the shareholders do. if there's something under the surface, this is backward looking to where it came from versus where it needs to go and it's something they should have been able to do internally. we are wondering where the innovation and imagination will come from to take it to the next level. >> to what degree do the contracts walk with beats? can they now take all of the streaming rights they had acquired in the negotiation with

that said, the role the jimmy iovine has in the music industry , and the role dr.re has in the music industry, goes far beyond their roles as musicians. they have long-term relationships in hollywood. that is something that steve jobs did a lot of damage with, and the result which saw the music industry suffer and never really recover in terms of recorded music since they struck those deals with itunes. >> thanks very much, cory johnson. erlichman joining us from los angeles. thanks to eric chemi of bloomberg businessweek. coming up, are outsiders muffling in on investments usually targeted by venture capital? we will look at the appetite for initial public offerings. ♪ >> this is "taking stock." i'm pimm fox. there have been a number of technology public offerings this year. many companies are seeing their share prices fall after the first day of trading. let's get details about the market and investor appetite for ipo plus. -- ipo's. leslie joins us with the managing director. leslie, great to have you here. give us details of what you are learning at this confer

dre, jimmy iovine who knows this company very well.lked to me about how much he knew steve jobs, how close their friendship really was. if you look at beats and the two separate divisions, beats electronics, let's start there. tim cook said they did 1.1 billion in revenue, that division. beats electronics. important to remember, this is a company that dominates that head phone space, controls about 52% of the high end of the head phone market according to npd. that's a space that's growing fast. it jumped about 20% in q1 year over year. also of course you're getting beats music, that's a streaming service. i asked tim took whether he was concerned about entering that space. obviously a lot of competition with pandora and spotify. cook telling me he was not concerned about that competition. rather his focus is on building the best product. you can see when it comes to music, that is where the growth seems to be, right? last year, digital music downloads, actually decreased for the first time but meanwhile, streaming consumption actually

he mentioned you heard jimmy iovine mention spodsfy. would refer to an interview with greg mcfay when talking about sirius, you and your viewers follow closer, what he said what sirius needs. >> a lot of the xm customers are streaming already, of a sirius or pandora or spotify. over time we will need to strengthen our offering through a partnership or acquisition or building our own we'll see. >> maybe should be buying the streamers. only pandora is public so -- >> you mention this, i have been a believer they ought to look at harman. i think apple has to own the car. that is the great 200 million market, right, in cars. look, if they did sirius, if they bought the sirius xm that would be a needle mover. you would say all right, they're in cars. remember beats is only in right now chrysler. harman is in every car. you need to own every aspect of a person's ecosystem. a purchase of sirius would be excellent for apple. >> move on to what got us excited this morning when we -- when you came in to make up -- whoa. by the way, perhaps, you k

it was founded by music executive jimmy iovine and dr. dre in 2008. apple is under pressure to deliver another it product. the acquisition could help the company bolster its online music business and recharge its cool factor. if the discussions result in a deal, it would be the biggest purchase for apple to date. jon erlichman is in l a it would be the biggest hurt just for apple by far ever. the last thing they bought that was anywhere near this was next computer for $400 million and does not compare. why this? >> you are right, apple does a lot of acquisitions but none that gets as much attention. you have to look at what is happening in the world of music. we already know that a lot of people are buying digital versions of songs, not physical versions of songs. it is about 39% of the global market. of it is9%, while 2/3 still people buying songs from services like itunes and downloading and purchasing songs, the huge growth is coming and these subtraction services, services like spotify and what pointis offering to the that as of last year, you had

and it's jimmy iovine. i blew the story.s the way the company beats fits with apple, apple's earbuds, not so good. the beats, the best in the business. there's the streaming and the itunes piece, putting them together. beats has a screaming business, right? >> but they're not -- i would agree with you. >> we only have 200,000 customers to compete against spotify. apple has a radio business that competes with pandora. they need to do that. all the growth in the music business is going to spotify and pandora. >> the announcer said on the software side, they were keeping itunes over here and run beats separately. >> you have a good executive. you're going to put the beats, hardware under him. and he has always been steve's right hand man. you put jimmy iovine and the subscription service reporting to him. it seems to work pretty coherently. >> you have this team of artists if you will around tim. how is that going to work? >> it's angela running the stores. jimmy is going to be involved in the music. >> who do they get from chr

you can see the difference between the personality of eddie cue and jimmy iovine. at one point he said he did not say anything because he works at apple but he is larger-than-life and outspoken. he's not your typical buttoned up apple executive. >> i think apple needed it. content right now is what is selling hardware. the apple tv -- the ipod touch -- you need the content community apps and apple has had a limited orthodoxy. -centricad a download model and consumers want to get content in different ways. bneats brings that to apple. >> you don't think there will be a culture clash? >> if dr. dre keeps making those videos, there might be. they are culturally less to similar than you may think. steve jobs was very much considered to be an artist by manning. arty many so they approach and a different way. you the marriage of artistry with technology. i think this is an exciting deal to signify this convergence of technology with great content and ultimately content drives take -- great technology. this deal is seminal for apple in another way. the biggest of before t

one thing is for certain, jimmy iovine is irrepressible. he's going to be an asset to apple but also could be a challenge to control. he was very outspoken on a number of issues and wanted to step back and say i'm at apple now, i can't say anything. but he mounted a spirited defense of this acquisition, certainly $3 billion, not a lot of money for apple. i think in the future we will judge the acquisition this way. if apple makes big content deals they haven't been able to put together up to this point, it will be seen as a success. if they figure out the brand issues and apple continues to innovate and they retain these executives, it will be seen as a success. on the other hand, if they don't manage to keep the brand loyalty of both of these brands and figure out how to communicate that to people, people will look back and say maybe it made sense on a money front but in terms of apple's focus, this was a liability. >> isn't there anything in it that says they have to keep them around for a number of years? are there contingencies in the d

beats cofounder jimmy iovine spoke at a conference. take a listen.s its point guard needs to change its offense a little bit when they get a new team in, and they are adding pieces. they have andrew from burberry who is brilliant. what a great choice that was. i had a meeting and i went wow, she is incredible. there are other people have added to the team that are amazing. isnnie, you know, the guy incredible. steve put the greatest team in the world together. >> he is drinking the apple kool-aid, jon. senior west coast correspondent jon erlichman. you have been following this story for us, so put this deal into context and what iovine was talking about, assembling this new team. >> well, yeah, the point guard he was referring to, steve jobs. i think that this is somebody who is very comfortable in these two worlds, and that is something that apple could really benefit from. when i have spoken to iovine in the past coming likes to highlight the fact that apple did in a lot of ways changed the music industry. steve jobs played a huge part in that, and

jimmy iovine and dr. to work for apple, who is paying $3 billion before beats and their streaming music service. targetser says shareholders should vote, saying the directors did not do enough to prevent the hack attack during the holidays. target has hired a new chief information officer. another milestone four bitcoin, subscribers will be able to pay bills in decline. -- bills in bitcoin. >> i will believe it when i see it. some wonderful photos. >> we will start with our number three photo of the day. if you think your commute is bad. a line to enter the subway station in beijing. increased security following a terrorist attack. help for a mass trial people who were suspected guilty, they found 55 guilty. look at that. >> richard haass, i thought of the butterfly effect when i saw this. here it is. >> it is a reminder of two things -- china has an enormous denominator. anything you say about china, you have to think about 1.3 billion people. when chinese leaders wake up in the morning, they do not take

beats is the headphone and music streaming company started by jim a jimmy iovine and dr. dre. those two names are key. here's what apple analyst gene munster told me when word of the deal first leaked. >> jimmy iovine is the head person. there may be something behind that in his role in this that is kind of driving this deal. >> apple has been known to make purchases because they're trying to buy companies for the talent, for the engineers, for the talent, so we'll see. the hope is the pair will help improve apple's content offering in both music and video. it will also make dr. dre the first billionaire in hip-hop, at least according to a drunken celebration video posted to facebook earlier this month. as for apple, munster says this purchase could open the door to more deals. remember apple's cash pile's more than $150 billion. >> so, dr. dre, a very rich man. i made this joke last hour, but maybe you weren't awake. >> do it again. >> i'll do it again as if never before. dr. dre, this is why your mother always said you should grow up and be a doctor, because you make good mo

dre, and famed music producer jimmy iovine, for a reported $3.2 billion.eats, best known for those headphones worn by celebrities like lebron james, katy perry, and justin bieber, recently got into the lucrative streaming music business. streaming services like pandora and spotify allow users to listen to whatever they want, whenever they want. beats charges $10 for a monthly subscription. which industry experts say could be what lured apple. it's an area that apple's late ceo steve jobs didn't project. once saying, "customers don't seem to be interested in it. people want to own their music." but the itunes era may be ending. last year, for the first time, online music sales dropped. one media expert saying, "the age of digital downloads is basically over." apple hasn't commented on the potential deal. however, dr. dre posted this video just last night. >> the first billionaire in hip-hop. >> reporter: dr. dre, up from the rough streets of compton, conquering the hip-hop world. six grammys under his belt, but this could be his biggest hit yet. again, that

dre and music mogul jimmy iovine. apple will pay $3 billion for beats. slightly less than the $3.2 billion orginally reported by the financial times. still it makes dre, one rich and happy rapper as he and lovine go to work for apple. m&a action is picking up as more companies have plenty of cash to spend- chuck coppola joins us me with more. hello chuck.. angie, corporations are seeing green! as the s&p hits new highs, corporate cash balance sheets are on the rise. usa today reports nine s&p 500 companies had cash piles that grew by 10% in the first quarter. among those on the list: adt, gilead sciences, intuit, marriott international, paychex , altria, citrix systems, intuitive surgical and facebook. these companies could become magnets for investors seeking stocks "perhaps' ready to issue dividends. mc-changes are happening under the golden arches... business behind the counter is showing signs of picking up after the burger chain reported flat sales in april following 5 consecutive months of declines. now, mcdonald's ceo don thompson tells investors.

dre and jimmy iovin created a stylish accessory for audio consumers. ted a sound profile to serve as the baseline for beats bass heavy products. emily sat down and started by asking how this deal came about. >> jimmy was looking for something else to do and they wanted to do speakers. i said no, the new speaker is the headphone. people don't listen to speakers anymore because they are so big. he said you are right. let's do headphones. that's how it all started. i am an audiophile and wanted to really get into making the best headphone in the world. used $.50eaf dr. dre in the club as a sounding board. >> if it doesn't sound good in the club, forget about it. >> we have some beats headphones with us today. what part of these headphones are you responsible for? >> first, those are the new ones. we didn't do any of that. the previous studio, we did everything, all the engineering come all the sound profile. the real great thing about what get bass sound on headphone. that is what headphones had been missing up until the time we designed headphones. >> wha

jimmy iovine and dr. dre can write a deal that they could not. do you think they have those deals with them? but that's an unknown. what we do not know is the scale of the beats business model at present. what kind of numbers should they be penciling in? you can make a case if you are apple based on your number of credit cardillion numbers on file. you can make it work in pencil it in. it comes back to, again, at what kind of return will this entail for shareholders? >> jon erlichman nla,-- in l.a., without about the berlin wall and wanting to bridge the differences between apple in the music industry. what do you make of that? is beats really the solution? it could be. following what alex said, we heard today from george blankenship, an apple executive who played a big role in the retail strategy who told us he does think that there's something we are not talking about yet which will come to light in the months after this deal which will make it a little more sensible. you see how people are consuming music today, emily. it is changing from when

tim cook posted this photo of him sharing a laugh with eddie cue and jimmy iovine and dr. dre. i spoke with cory johnson via skype. i started by asking brad what he thought of comments. could the products coming up really be better than the iphone, the ipad and the ipod? >> we will believe it when we see it. >> could you see the eyes rolling when you saw the tape rolling? >> it comes from a position not of strength but of weakness. music is core to the apple franchise. really, over the past couple of years, the hot services in music are pandora, spotify and youtube. apple has squandered that franchise. by buying beats, they get the credibility of its founders and they get the hardware and the beats music subscription service. >> look, music is what brought apple back. the ipod is what brought apple back. the ipod on windows is when the growth accelerated on apple. this really does show apple trying to fix a problem they have got with their old business, not developing new business. the comments about the product pipeline. what did they invent anywhere near an ipod or the imac,

pressure to deliver its next blockbuster product, announcing buying beats yesterday with cofounders jimmy iovine dre. google is giving information after 700,000 miles of

>> jimmy iovine. i said jimmy, the world has changed.you know, experience concerts differently. we need to make hardware. from that point on i knew it. we need to make hardware. you know how hard it is to make hardware. that's why they call it hardware. i was like, yeah, jimmy, we need to be in hardware. in 2005 and 2006, you know, couple years pass, and he came up with the idea of beats. with dre. and asked me if i wanted to be a part. >> head phones have been around so long. why did you decide to invest in headphones? what new could you do with headphones? you have because the value of this business is incredible. >> so when you think of headphones, it's the most intimate relationship you could have with someone because you're putting them right on your head and your ears. so they're like whispers if you will. you're letting someone right -- putting someone this close to you. >> but they already existed so what were you going to do differently? >> they existed from a technology standpoint and tech for tech is just tech. as soon as art

>> the history of jimmy and dre. iovine was at the forefront of rap music.into trouble with bad lyrics. these guys have been partners for a couple decades. they created a partnership, aftermath records, they have been partners for a long time. this came out of the two of them wanting to do something different. ownsally, vivendi, which universal which owns interscope where jimmy is. they said you can do this on the side, they got 14% for allowing jimmy to do this. i will make about $500 million off of this. beats involves monster cable, it parts maker in california. they nailed it. they got the marketing bright and creative the right buzz. dre has a huge cachet on the streets. it became a must-have product. >> why now? what are they selling this business for and what do they do next? their hugely successful, why the deal now? it is as good as it going to get or do they have something else? what's the inside track? >> that is interesting, the why. these guys are not your classic entrepreneurs. they have used corporate cash to create assets that they have been

travis kalinic of uber, jimmy iovine of beats.ws what he's going to say about apple. >> stay with us on "squawk alley" more of our exclusive conference coverage. we'll talk to jeff weiner, ceo of linkedin and former "huffington post" ceo eric hippeau and flipboard ceo. don't go away. that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ female narrator: through sunday, it's posturepedic through sunday, it's posturepedic versus beautyrest with up to $400 off. serta icomfort and tempur-pedic go head-to-head with three years' interest-free financing. mattress price wars end sunday at sleep train. ♪ your ticket to a better night's sleep ♪ ♪ ♪ >>> big product announcements aren't the only news being made here at the code conference, google co-founder say gaye brin addressed the nsa leak issue. >> the snowden revelations are a huge disappointment to certainly to me, and to obviously to the world as

dre and jimmy iovine. we'll show you the winners in a minute. mine was earned in korea in 1953. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. she keeps you on your toes. you wouldn't have it any other way. but your erectile dysfunction - it could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pres

jimmy iovine is a genius in the music business, been in it since the early '70s. beats didn't have the much in terms of intellectual property that would justify a price like this. there would probably be a culture clash between a somewhat buttoned down, quieter apple character and dr. dre. plus it's backward looking. music, apple already won that. why spend a bunch of money to try to win it again. what is beats? they sell from mid-200s to mid-400s. i had a pair, they tended to fall apart. they managed to turn that accessory into a fashion statement in a way that hadn't been done before. the company is about six years old. of course they have the streaming music service. downloads have pretty much flattened out. they've gone down a bit, streaming services like spotify and even pandora are on the rise. not a lot of profit in those but they're gaining in popularity. apple might be looking for a way to answer. $3.2 billion, boy, that's an expensive way to answer. >> it's not like a 16 or $19 billion whatsapp. >> i see so many reasons to question it. my knee jerk react

dre founded with music man jimmy iovine.d the company in 2008, marketing the headphones as high-tech, stylish accessories. musicats has a streaming service that might be just as attractive to apple. they might make a killing on a deal like that. borgota was the first casino in new jersey to offer online gaming. will the best payoff? the ceo joins me. we are back in two the woman it's. ♪ -- we are back in two w old minutes. ♪ >> atlantic city's borgota hotel and spa was the first casino to offer online gambling. slower than off many expected. i sat down with las vegas sands billionaire sheldon adelson who had this to say about online gaming. >> let me say this, there is no reason, nor any compelling reason to put a casino in everyone's pocket. college, of age, students that go plenty of money, unfortunate people, working class people, middle-class people that will be andly exploited by and -- easily incentivize to go on the internet and gamble. for what? >> he calls that exploitation. we are joined by borgota casino and spot

lackluster product, announcing a product yes -- announcing buying beats yesterday with cofounders jimmy eileen -- iovinere.

. >> how might jimmy iovinea nd -- jimmy iovine and dr. dre change things at apple? they have the same kind influence on apple that tim cook had for different reasons? >> i think the story that we watch from this point on is going to be the really interesting one. these are two people who, long ago, said people do not want to pay for music anymore. it is clear they would rather rip it off the internet. even before they launched this is production -- the subscription program, they said that is where we are likely to be. you can market big names with less money. you start to think about how -- some of the ways apple is going to be marketing music through the different streaming options they have going forward. and then the unknown. they were thinking about the listening experience in your living room. we spoke to an apple executive who thinks there is something alreadyh are working on that we don't know about, which maybe will give us an a-ha in a few months. it is hard to say. apple has so much cash, this is a bet they can afford to make. >> i'm sure dr. dre and jimmy

will.i.am will weigh in on that deal with apple, and talk about jimmy iovine and more.ack in a minute. mayo? corn dogs? you are so outta here! aah! [ female announcer ] the complete balanced nutrition of great-tasting ensure. 24 vitamins and minerals, antioxidants, and 9 grams of protein. [ bottle ] ensure®. nutrition in charge™. [ bottle ] ensure®. and i get a lot in return with ink plus from chase i make a lot of purchases for my business. like 60,000 bonus points when i spent $5,000 in the first 3 months after i opened my account. and i earn 5 times the rewards on internet, phone services and at office supply stores. with ink plus i can choose how to redeem my points. travel, gift cards even cash back. and my rewards points won't expire. so you can make owning business even more rewarding. ink from chase. so you can. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current

but just as important as jimmy iovine, worked with everyone from lady gaga to u2, and one of the industry'sjoin apple's team in a creative role. but they aren't the only ones to stand. he and dr. dre aren't the only ones that stand to make money. carlyle group invested $500 million last year. vivendi, and universal investors. we hear it could be announced as soon as next week. in the meantime, this gives new meaning to the dr. dre lyrics "still got love for the streets." kayla, back to you. >> all right, thanks so much for that, morgan. >> let's look closer at what the deal would mean. michael wolf is the co-founder of activate, former ceo of mtv and indeed former yahoo! board member. welcome to the program. >> thank you. >> so which side of the fence do you come down here? are you on the kind of intellectual side that this is about content and this is about music streaming? or are you kind of more on the imaging side of things, that this is about hip-hop cool and this is about reinvigorating a brand? >> yeah, where i see it is this is about a brand that resonates across age groups. yes, it