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Apple hoping to find its voice with Shazam’s acquisition 

You were probably thrilled when you first knew about Shazam.

The app, long known to be magical for its capacity to identify songs, movies, TV shows and commercials, is even about to get better having been acquired by Apple.

The $400 million deal that recently took place promises new exciting plans in store.

“Shazam is one of the highest rated apps in the world and loved by hundreds of millions of users and we can’t imagine a better home for Shazam to enable us to continue innovating and delivering magic for our users,” an apple spokesperson said following the acquisition.

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Despite its increased popularity with users, however, Shazam was in the red.

“Revenues last year grew 14 per cent to $54 million, with pre-tax losses of £4m ($5.3M),” the Financial Times quoted UK company filings as saying.

So why would Apple want to buy a losing company?

Better team of employees

The most obvious benefit to Apple Music is where Shazam’s team could help improve the experience of the service, according to the Verge, a technology platform.

Meanwhile, BGR, an online mobile new site, says that Shazam has 250 employees who are coming with the acquisition.

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BGR explained that Apple is lagging behind its big rivals when it comes to smart speakers and digital assistants.

“Siri, an intelligent personal assistant, part of Apple Inc.’s iOS, is outclassed in terms of functionality by Amazon’s Alexa and the Google Assistant, and Apple’s HomePod speaker wasn’t a hit in the market yet, even while Google and Amazon are onto the second generation of their smart speakers,” an Apple spokesperson said.

“Shazam’s employees can provide a much-needed boost to Apple’s effort to catch up with its rivals, all while providing a short-term bump to Apple Music. Sounds like a win-win to me.”

Recurring revenue

Shazam has succeeded in building a huge users’ database.

The company’s website shows that the app has been downloaded more than 1 billion times while it boasts more than 120 million active users, who use the app 20 million times each day.

That loyalty could lead to more paying customers for Apple’s own services, such as Apple Music, according to CNBC.

Moreover, Shazam generates the bulk of its revenue through advertising.

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“It shows ads to users while they scan their environment to identify a song or other audio playing nearby. Shazam also gets paid to refer traffic to Apple, Spotify and other digital music providers. The idea is that a user identifies a song, and then is encouraged to go stream it on Spotify or Apple Music or download it from the iTunes store,” CNBC explains.

CNBC says that Apple has been talking up its services business to Wall Street, and it wants to be seen as more than a maker of beautiful electronics. “So it makes sense for the juggernaut to invest in a software brand that already has recurring revenue and loyal users in dozens of countries,” it said.

Better HomePod experience

According to MacWorld, a platform with news about Apple, Shazam could really help Siri’s ears with HomePod.

“If Apple could leverage its Shazam acquisition to build some serious smarts into HomePod, it could be a difference maker,” said MacWorld.

“We will already be able to ask Siri to play things like the most popular song in 1986, but Shazam could amplify its knowledge considerably. It would be great to tap your AirPods and ask “Play the song that goes like this …” or “Play that Ed Sheeran song about Ireland.” Shazam might not be able to do that now, but the groundwork is certainly in place, particularly when paired with Apple’s own AI musical capabilities,” it added.

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Boosting Augmented Reality (AR)

The Verge reveals that Apple is interested in Shazam’s augmented reality technology, which could help improve its own offerings.

MacWorld says that Apple is lagging when it comes to augmented reality, especially on the Artificial Intelligence side of things.

It says that Shazam could give Apple a real boost here. “While the public face of Shazam’s visual recognition mainly focuses on brands—like scanning a movie poster to access a trailer—but Apple could tap into Shazam’s engine to give Siri a whole new class of intelligence,” it said.

“We’ve read enough rumors about the Apple car and Apple glasses to see that AR is the next area of focus, and Shazam could help bring that future into view,” it said.