Apple is reportedly close to acquiring headphone maker and music streaming company Beats Electronics for $3.2 billion, in what would be one of the largest ever acquisitions by the iPhone maker.

According to Financial Times sources, the deal could be announced next week, although some details still need to be agreed as part of the negotiations between the companies.

The deal will see Apple acquire the streaming music service, which only launched this year, as well as the Beats-branded headphone and audio equipment. Beats Electronics was founded by music producers Jimmy Iovine and Dr Dre.

The plan is for the management of Beats to report directly to Cook, according to the sources.

Apple has tended to shy away from high-profile acquisitions, meaning the move for Beats Electronics would be a departure.

Cook said recently that Apple was looking for more acquisitions after buying 24 businesses in the space of 18 months, and that large acquisitions were not out of the question.

Following the huge success of iTunes and the iPod, Apple now appears to be looking to acquire technology that will help it stay relevant in the ever-changing music market.

Subscription services are a huge growth area in the music industry while music downloads fell 2 per cent to $3.93 billion in 2013, according to music industry association IFPI.

Apple previously acquired music streaming services Lala in 2009 and subsequently launched iTunes Radio, but appears to be strengthening its efforts around the approach with the Beats acquisition.

The Beats brand could also help Apple counter Samsung’s efforts to reduce the appeal of the iPhone brand.

However, initial market reaction – particularly from analysts – was one of surprise and cynicism, with most market watchers questioning the rationale behind the megadeal.

The price Apple is reported to be willing to pay is significantly higher than the $1 billion valuation of Beats following a $500 million investment from Carlyle in September last year.

Taiwanese smartphone maker HTC sold its 24.84 per cent stake in Beats Electronics for $265 million, in September last year. The Beats branding had featured in HTC’s top and mid-range smartphones.