Apple is set to buy headphone maker Beats Electronics for $3.2bn (£1.9bn), it has been reported.The Financial Times says the deal could be announced as early as next week, marking Apple’s largest ever acquisition.

Founded by rapper and music producer Dr Dre and fellow music producer Jimmy Iovine in 2008, the firm produces ‘Beats by Dr Dre’ headphones and also runs a music streaming service.

Beats Electronics received a $500m (£295m) investment from Carlyle Group last September, valuing the company at more than $1bn.

It has been reported that Apple is contemplating a Spotify-like on-demand music service.

Some technology analysts have speculated that the purchase plans are motivated by acquiring Beats’ streaming arm rather than the headphones division.

Apple is sitting on a $133bn (£78bn) cash pile, and chief executive Tim Cook has said the firm has “no problem” with spending large sums of money to acquire top companies.

Apple and Beats have not commented on the reports.

However, in a video posted by singer Tyrese Gibson, Dr Dre boasts that he is “the first billionaire in hip hop”.

He then laughs as Gibson says: “Billionaire boys club for real, homie. The Forbes list just changed.”

Dre, a former member of NWA, compared his company to Apple in an interview in 2011.

He said: “We’re trying to eventually be second to Apple. And I don’t think that’s a bad position.”