Apple acquires Shazam, an app that recognizes songs, in order to gain subscribers for Apple’s music streaming service. Apple has stated that this will allow them to “continue innovating,” however, they have not commented on specific plans for innovation. The Shazam app identifies songs and directs their users to listen to the song through Apple Music or Spotify. Apple currently has 30 million subscribers for Apple Music, and Spotify has 60 million. Apple believes that Shazam can help them to gain more subscribers by referring Shazam users to Apple Music. People then will go buy the song through Apple or subscribe to Apple Music. This “creates a full ecosystem.” Since Shazam’s debut in 2008, it has provided Apple with data as to what songs people are listening to and what they predict to be popular. Apple has increased their music business by selling songs for ninety-nine cents, creating the iPod, and implementing iTunes. This made portable music available to the masses. Apple plans to launch their first smart speaker, the HomePod, next year. They have competition with Amazon.com Inc.’s Echo and Alphabet Inc.’s Google Home.
Apple acquiring Shazam will allow them to expand their target market and customer base. Apple has a monopoly over Apple product users because iTunes and the Apple Music app is already available to iPhone users. However, until recently Apple did not have a music streaming service, which led their customers to turn to Spotify. Shazam’s user base attracts people within this market. Apple acquiring Shazam has the potential to attract other Apple product users who have a Spotify subscription. Apple is making it more convenient for music listeners to utilize their products. People will typically use the products that are most convenient to them. Apple will soon be releasing a smart speaker, the Home Pod. Expanding into this market will allow customers to have a full range of music-related product choices available through Apple. This will equip Apple to compete with Spotify and smart speakers such as Echo and Google Home.
By: Megan McKee
This is a very interesting take, as I am an iPhone user that has Spotify. When I find a song that I like using Shazam, it gives me the option to play the song on Apple Music or Spotify. I wonder how this will change now that Apple has acquired Shazam.
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