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Apple To Reportedly Acquire Shazam For Nearly $400 Million

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Apple To Reportedly Acquire Shazam For Nearly $400 Million

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  • Published: December 9, 2017 12:13 PM IST

Apple could announce acquisition of Shazam as early as Monday. The deal is valued at $400 million, a huge discount from $1 billion valuation in 2015.

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Apple is nearing a deal to acquire music identification app Shazam. The app lets you identify any song, movie or a TV show from the audio playing around you. It would be one of the major deals for the Cupertino-based iPhone maker since its acquisition of Beats by Dre in 2014.
The deal is seen as an attempt by Apple to step up its game while rival Spotify prepares to privately list itself on the stock market. Sources familiar with the development told TechCrunch that the deal could be finalised this week, with official announcements as early as Monday. According to Recode, the deal could be valued at around $400 million, which is lower than the $1 billion post money valuation of the company in 2015.
With the acquisition of Shazam, Apple stands to benefit in its music and sound recognition technologies. It will also get rid of the commission it pays to Shazam when users land on iTunes Store to buy content they discover on the platform. According to Wall Street Journal, Shazam’s major source of revenue comes from sending users to platforms like iTunes and it was responsible for 10 percent of all digital downloads.
Apple also stands to benefit from Shazam’s augmented reality platform, which CEO Tim Cook believes can be as big as the smartphone itself. Shazam launched its AR platform in 2015 allowing users to scan magazines, books, posters, advertisements and other physical products and launch 3D animations, product visualizations and even 360-degree videos. Apple could bring some of Shazam’s AR tech into its ARKit platform or spin it off as a Google Lensrival.
It isn’t clear whether Apple plans to shut down the app, but if it does, it would affect music streaming platforms such as Spotify and Google Play Music. Recode adds that Snapchat parent Snap also approached Shazam for a deal, but eventually Apple won.
Shazam surpassed 1 billion downloads in September last year and the actual number should be higher. It is not clear what will turn out of this acquisition, but it will definitely serve as value addition to Apple Music and company’s augmented reality efforts.

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