Tech giant Apple (US:AAPL) has confirmed its intention to buy music recognition app Shazam. The price tag is still under wraps, but market experts think the British company – which listens to and identifies songs – may fetch as much as $400m (£300m), making it Apple’s biggest acquisition since that of Beats headphones in 2013.
For those familiar with Shazam, Apple’s decision may seem a little unusual. The app isn’t particularly popular with iPhone users and although it claims to have been downloaded more than 1bn times, it hasn’t appeared among Apple’s list of most popular apps for many years. Indeed, the $400m expected sale price is well below $1 trillion valuation it commanded last time it raised money.
So, what is the thinking behind the acquisition of a music company which appears to be falling out of favour? Mark Mulligan, from consultancy Midia Research thinks Apple probably wants to get hold of Shazam’s data on its users’ music tastes. Integration into Apple Music will help the tech giant compete with European rival Spotify which is widely regarded as the superior streaming company when it comes to suggesting new music.
The software will also help Apple’s iPhone compete with Google’s Pixel phone which can identify songs without being asked. Meanwhile, it could provide the missing piece of software for the smart helper Home Pod – a rival to Amazon’s Echo – which has been struggling to launch for more than six months.
