Acquisition estimated to cost $400 million

Apple (AAPL) announced it would acquire Shazam Entertainment, the UK-based (EWU) startup behind a popular music recognition app called Shazam. Apple confirmed the deal with Shazam in a statement cited by CNBC and other news outlets. “We are thrilled that Shazam and its talented team will be joining Apple. Since the launch of the App Store, Shazam has consistently ranked as one of the most popular apps for iOS,” Apple wrote in a statement. Apple is reportedly paying $400 million for Shazam acquisition.

Apple Acquires Music Recognition App Shazam

Identifying songs and ads from short audio samples

People use the Shazam app to identify songs, television shows, and advertisements in their environment. The identification process is based on short audio samples, and the app uses the microphone on the device to do the recognition.

Shazam has attracted a huge user base for its music recognition app. The company says on its website that the music recognition app has been downloaded more than a 1.0 billion times, and that the app is used by hundreds of millions of people each month. The Shazam app, which is available in more than 190 countries and territories, has more than 20 million daily users.

Shazam is integrated into Snapchat to allow users of the photo-sharing app to identify songs playing in their environment. Snapchat is run by Facebook (FB) rival Snap (SNAP).

A potential boost to Apple Music subscriptions

“Apple Music and Shazam are a natural fit, sharing a passion for music discovery and delivering great music experiences to our users,” Apple said in a statement confirming the acquisition of Shazam.

Therefore, there is little doubt that Apple would want to leverage Shazam’s song recognition capability as well as its huge user base to attract more paying subscribers for its Apple Music streaming service. Apple closed 2017 with 30 million paying subscribers on Apple Music compared with 60 million paying subscribers on Spotify, roughly 4.9 million paying subscribers on Pandora (P), and 3.0 million paying subscribers on Tidal.

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