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Apple is set to make the biggest purchase in its history: a $3 billion-plus deal for Beats, reports ReCode.

Beats sells high-end headphones and recently launched a streaming music service. Industry sources peg Beats’ electronics sales at more than $1 billion a year.

Beats Audio streaming service is rumored to have mere 200,000 subscribers, mostly via AT&T. Beats audio streaming features offline listening and ad-free playback only for Premium subscribers of the service.

Apple buying Beats is an affordable bet on streaming to hedge against the decline of downloads, writes Jon Maples. The rumored deal, first reported by the Financial Times, isn’t closed yet, according to people familiar with the transaction.

Om Malik says it’s Apple’s answer to Spotify, a commercial music streaming service providing content from record labels including Sony, EMI, Warner Music Group and Universal, and could be a hardware brand for future products.