Apple says it is buying Beats Music and Beats Electronics in a much-hyped deal worth $US3 billion ($A3.25 billion).
The move is expected to help the US tech giant, a pioneer in digital music with its iTunes platform, ramp up its efforts to counter the successful models of music streaming services such as Pandora and Spotify.
The acquisition of Beats, the maker of high-end audio equipment and behind a subscription streaming music service, will be Apple's largest ever.
It calls for Beats co-founders Dr Dre, a Grammy-winning hip-hop pioneer, and Jimmy Iovine, a veteran music executive, to join Californian company Apple.
"Music is such an important part of all of our lives and holds a special place within our hearts at Apple," chief executive Tim Cook said.
"That's why we have kept investing in music and are bringing together these extraordinary teams, so we can continue to create the most innovative music products and services in the world."
Bringing Beats into the Apple fold will offer opportunities to weave the iTunes Radio service into more devices, and even spread the App Store's applications to other products, analysts say.
Adding Beats could also give Apple the ability to get more ad revenue from streaming services.
The deal represents a shift in strategy for Apple, known for developing its own products in-house and making only modest acquisitions.
Some analysts say the logic for the tie-up is not entirely clear.
"It's a little confusing to me what Apple is getting out of it," said Bob O'Donnell, analyst and founder of Technalysis Research.
O'Donnell said Beats "appeals to a demographic that is different from some of the typical Apple demographics" and has a streaming music service with "a relatively limited number of customers".
The deal could make Dr Dre hip-hop's richest mogul, with a net worth of up to $US800 million ($A865.57 million), according to Forbes.
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