Apple confirmed today in statements to several media outlets that it will buy Shazam, pending approval. This news had previously been reported by TechCrunch, which had one source claiming the sale price was around $400 million—far less than Shazam's $1 billion valuation at its last round of funding.

Shazam is arguably best known for its music recognition technology; tap the "Shazam" button in the app for smartphones and it will usually identify whatever song it hears after just a few seconds. Shazam has become so popular that there's even a network TV game show called Beat Shazam hosted by Oscar-winner Jamie Foxx. In it, contestants must guess songs faster than Shazam can.

But Shazam has also invested in second-screen TV viewing features, image recognition, and augmented reality services and products. Shazam's talent and technology could be used in several of Apple's products and initiatives, including Apple Music, Siri, and augmented reality.

Shazam already integrates with Siri. You can ask Siri "what song is this?" while a song is playing externally, and, after a long pause, it will provide you with the name and artist, along with a "buy" button for Apple Music/iTunes gussied up with the Shazam logo. Currently, the Shazam app allows you to add a song to your Spotify playlist after identifying it, regardless of whether you're using an Apple or Android phone. We don't know yet what, if anything, will happen to that feature because of the Apple purchase.

Samuel Axon

Samuel Axon

That said, the acquisition is probably about much more than the widely known music recognition feature. Shazam has been developing augmented reality features that allow brands to serve up customized ads and transaction opportunities to users who use the app on visual or aural cues around them. Apple's Tim Cook has made it abundantly clear that he expects augmented reality to be one of Apple's biggest areas of growth and investment. Much of the iPhone 8 and iPhone X's hardware and software is built with AR specifically in mind, and Apple is even rumored to be working on a pair of AR goggles, though it will likely be a while before we see those in the market, if we do at all.

Shazam could help Apple further monetize these AR features, among other things.