APPLE HEADQUARTERS IN CUPERTINO, CALIFORNIA
PHOTO COURTESY OF WIKIMEDIA
By CARLOS C. JOHNSON III
Apple has done it again. I’m starting to believe there is nothing this company cannot do. Apple has confirmed the purchase of Shazam, a music recognition service that garnered much attention during the rise of the smartphone era.
The terms of the deal were not immediately made public. Sources close to the deal value it at around $400 million. This seems to be a very good move for Apple. It looks like a natural fit. Apple is known for delivering great music experiences for their loyal customer and fan base. A spokesperson for Apple commented that they have exciting plans in store. I think we are all excited to see what Apple has in store.
Apple is paying a pretty penny for Shazam if the $400 million price tag is accurate. This would be one of their largest acquisitions in their history. As you may recall, Apple purchased Beats Electronics back in 2014 for $3 billion. That purchase jumpstarted Apple’s music streaming business. History buffs may recall Apple buying another startup founded by Steve Jobs called NeXT for around $400 million back in 1996. That was the purchase that brought Steve Jobs back to Apple.
Shazam is a startup that was founded back in 1999. The company was valued at $1 billion after its last round of financing back in 2015. Kinda makes the $400 million Apple shelled out look like a bargain. After all, $400 million to Apple is pocket change. Why? Because Apple’s market valuation is approaching $1 trillion. Yes! You heard me right: $1 trillion. As you can see, Apple likes big numbers. Speaking of big numbers, last year the Shazam app is said to have been downloaded over a billion times.
Shazam could prove to be a smart move for Apple. The service could be beneficial to the service Apple already employs such as the personal assistant Sire, their music streaming service, their new line of smart speakers, which by the way, are scheduled to hit the market next year in an attempt to compete with Amazon and Google, two stalwarts in the industry. Believe it or not, Shazam had previously partnered with Spotify, a direct competitor of Apple.
Tim Cook, CEO of Apple, said he is ready and willing to use the billions Apple has stored up to finance future acquisitions. In Cook’s own words, “We are open to acquisitions of any size that are of strategic value where we can deliver better products to our customers and innovate more.”
Carlos C. Johnson III, founder, The UnderCover Millionaire, www.theundercovermillionaire.com