Apple (NASDAQ:AAPL) buys music recognition firm Shazam for a rumoured $400 million. This was not an acquisition that the market saw coming by any length. The reasons behind the purchase are far from obvious, but there are several theories which actually make a lot of sense.
This looks as if Apple is actually going after the data that Shazam has, rather than the function of or the underlying technology behind the music identifying App. If you think about, Shazam started in 2002, 6 years before iPhone even existed, that means Shazam has a decade and a half’s worth of data that Apple is keen to get its hands on. This data could help Apple compete in the field of music more effectively against the likes of Spotify and is perfectly in line with Apple’s ambitions in the sector.
Spotify has a user base of around 60 million users, Apple Music has 27 million subscribers, the purchase of Shazam could be Apple’s way of playing catch up, at least on the data side, in order to move Apple Music forward.
Apple is trading marginally lower in the pre-market suggesting that investors are not so convinced on the move. No doubt investors will want to know more about the plans referred to in order to make a full judgement on the purchase
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