Apple’s likely acquisition of the music recognition app Shazam is making the headlines. The Silicon Valley-based smartphone giant is looking to buy UK based music app in $400m, which is much lesser than the estimated market value $1bn. Conclusion of the deal would make Shazam, the latest acquisition of UK based company by a Silicon Valley giant.
Now, the question arises why Apple is interested in acquiring Shazam?
Here are the possible answers.
Apple and Shazam are a natural fit
Well, the acquisition can just be Apple’s attempt to bring innovation. The company has recently filed its foldable display patent. But reasons for new acquisition seem to be competition specific. Shazam that boasts 100 million subscribers has remained in the list of top iOS apps for so long. According to BuzzFeed, Tom Neumayr, Apple’s spokesperson has remarked that Apple and Shazam are a natural fit. They can work to combine the passion of music discovery with the ability to deliver the great music experience. The statement also makes sense because Apple’s assistant Siri is already assisting the app. It answers the users’ verbal queries regarding playing songs.
Apple to Beat the Competition
Apple Music with 27 million subscribers has a robust competition with Spotify which has 60 million paid subscribers. Shazam makes money through commissions by referring its subscribers to both these apps. Media reports suggest that Apple’s acquisition of the music recognition app is an attempt to exclude the middleman and cut its commission costs. The smartphone giant may also be looking to surpass the competition by accessing the Shazam’s database. The acquisition would enable Apple to get insights about users’ music taste. In this way, it would offer better recommendations to its subscribers.
According to expert media analysis, Apart from Spotify, Apple is also facing competition from Google Assistant which is making Android users recognize any song even without an internet connection. Such feature is available with its Pixel 2 phone. By combining Shazam and Siri, Apple is planning to surpass its rivals.
Well, apart from Apple Music, other related apps of the company are Beats headphones division, Beats one radio station, iTunes Store, and Carpool Karaoke TV Show.
Effect on Shazam’s Subscribers
Well, the Apple’s acquisition of Shazam can impact the subscribers in any way. It all depends on how the app continues to operate after reaching an agreement. To beat the rivals, Shazam may stop referring its subscribers to Google Play Music and Spotify. Such attempt would equally impact competitors as well customers. Not getting appropriate referrals might affect the app’s user base as well. But, it all depends upon how efficiently, Apple succeeds in filling the gap, or monopolizing the market if it intends to do so.
Snap’s Acquisition of Shazam
It seems that Shazam has huge demand as so many companies are interested in acquiring it. According to TechCrunch, Snap also showed interest in this music app which was going well with Snapchat. But company retracted due to its unstable position at the stock market. Snap’s inability to pay for the Shazam has paved for Apple go ahead with the acquisition.