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article imageApple set to acquire Shazam in $400m deal

By James Walker     Dec 11, 2017 in Technology
Apple is close to acquiring music recognition service Shazam in a $400m deal. According to media reports, the purchase will be confirmed this week and will see Apple acquire a notable platform. Shazam is capable of identifying songs using a phone.
UK-based Shazam is known for its popular app that lets you get the title and artist of music playing in your environment. Shazam calculates the digital "fingerprint" of songs to match them to known tracks in its database. You can identify the music playing in a film, advert or public location by letting Shazam hear it for just a few seconds.
Music market share
According to TechCrunch, Apple is in active discussions with Shazam to acquire the company and its technology. Shazam has remained independent since it launched in 1999, initially as an SMS service.
It then rose to fame as smartphone app stores appeared, accumulating over a billion downloads to date. The deal is said to be worth around $401 million, a figure considerably lower than the $1.02 billion associated with the company since its last funding round in 2015.
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Apple's motivations for acquiring Shazam aren't known. However, there are several standout reasons why the company could be interested. Shazam's technology could be of use to several applications around music and digital media. Apple's expanding its own Apple Music streaming service and is also venturing into smart home devices which could include music recognition.
Shazam would allow Apple Music to increase its market share by making it simpler for users to identify songs. The acquisition might harm Apple's industry competitors such as Spotify, Amazon Music Unlimited and Google Play Music as Shazam would no longer direct users to these services. Spotify currently has over twice as many users as Apple Music, claiming 60 million people as opposed to Apple's 27 million.
Augmented reality
Lately, Shazam's been diverging away from its core music fingerprinting service into new technologies. The company now offers an augmented reality platform that can be used to launch digital experiences from physical media. Brands can include special Shazam codes in magazines and advertisements. When scanned inside the Shazam app, a 360-degree video, photo or product page is displayed.
Apple's also expanding its presence in augmented reality. The technology's set to grow considerably in the coming years as it becomes an integral part of smartphone experiences. Shazam's existing platform could give Apple's ecosystem a boost, enabling it to access new visual recognition capabilities without needing to start from scratch.
Shazam made around $54 million in revenue in the last fiscal year and posted a loss of around $5.3 million. The company is heading towards profitability as its service grows. Shazam CEO Rich Riley suggested the firm could be an acquisition target earlier this year. The deal with Apple may be publicly confirmed this week.
More about Apple, SHAZAM, Music, Streaming, augmented reality