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Why Apple just spent up to US$400 million on song-identification app Shazam

Prior to the deal, Shazam was profitable and was used 20 million times a day around the world

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Photo: REUTERS/Yuya Shino

By Lora Kolodny

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Apple confirmed on Monday that it is acquiring the popular music identification app Shazam. The deal is estimated to be worth around US$400 million, according to Recode.

Apple is not particularly acquisitive compared with other tech giants such as Alphabet or Microsoft. According to Thomson Reuters, Shazam is Apple’s fifth acquisition this year, but only its 68th over the life of the company.

So what did the world’s biggest company see in Shazam? Here are several ideas:

Loyal users

Shazam has amassed a serious user base. The app has been downloaded more than 1 billion times. Shazam boasts more than 120 million active users, who use the app 20 million times each day, according to the company’s own website. Its users are loyal, too. That loyalty could lead to more paying customers for Apple’s own services, such as Apple Music.

Recurring revenue

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