Technology has made our world a more accessible place to live, and it connects us in ways that seemed unimaginable just a few short years ago. To those of a certain age, it’s interesting to look back on life — when technology’s exaggerated possibilities were limited to the fictional realm of Hollywood blockbusters — and recall an existence free from the technological trappings we currently live with.
But today, thanks to incredible ingenuity, we can now use cell phone apps to identify songs being played within earshot. Shazam is one of those apps. Shazam’s immense popularity with app users and music lovers makes it an interesting stock option. The problem, however, is that it's not a publicly-traded company. One of the world’s most recognizable brands — Apple — purchased the app in December 2017, making its stock a logical replacement for those interested in Shazam.
Shazam: An Overview
Shazam is a music lover’s dream. Imagine hearing a song from your childhood that you could never identify, or even a song you’re hearing for the first time. Perhaps typing a few discernable lyrics into a search engine could reveal the tune, but that’s never a sure thing. Or humming the melody to a friend with the hope that they’d be able to decode your interpretation.
Shazam makes those options obsolete. Shazam is a music recognition app that listens to a song and within seconds can tell you the title and artist. Chris Barton, Philip Inghelbrecht, Avery Wang and Dhiraj Mukherjee developed the idea for Shazam in 1999. The quartet’s initial vision of the software was to use it as a radio monitoring device where mobile users could find out, in real-time, the song currently playing on the radio.
But Barton sensed a limited reach with that approach and believed it’d be easy for a competitor to swoop in and circumvent what they were doing. So while living in London, he altered his thinking and began dissecting their business model to proactively check it for weak points. He internalized the words of one of his college professors who said entrepreneurs must consistently think outside the box if they are to create innovative and useful ideas.
To add further innovation to their idea, Barton and his team configured the software to also equip users to purchase music, watch videos, see lyrics and send music greeting cards to friends.
Not only was their idea an out-of-the-box concept, but it was also many years ahead of its time. The primitive nature of cell phones in 1999 — limited to placing and receiving calls or sending and receiving the occasional text message — restricted Shazam’s expansion in the short term. The idea was developed 7 years before the iPhone and 8 years before the App Store.
Shazam was first made available in the United Kingdom in 2002, and users would simply dial 2580 when they heard an ambient music playing in a public space. Fifteen seconds later, the user would receive a text message with the song’s title and artist. The user was charged 0.63 cents if the system successfully identified a song; there would be no charge if it didn’t. But without the backing of millions of users, revenue was limited.
Tough Times Early For Shazam
The revolutionary idea of Shazam didn’t equate to profitability right away. The marketplace simply wasn’t ready for it. The company had relied on venture capital funding, which ultimately resulted in several rounds of layoffs. In hindsight, the founders acknowledged that if given the chance to do things differently, they would have waited several years to go to market at a time when consumers were ready and when technology was more advanced.
But as it was, Shazam stayed lean while fine-tuning its process. It wasn’t until 2007 when Apple introduced the iPhone, and in 2008 when the company launched the App Store that Shazam’s popularity took off. It was one of the first apps on the App Store. What started as a fair song recognition program used as a radio monitoring device has now turned into an app that has been downloaded 1 billion times around the world, with users identifying songs 20 million times per day.
Barton, Inghelbrecht, Wang and Mukherjee have all left the company at different times for different reasons, but Shazam has become the product that they dreamed it would.
Apple Acquired Shazam
In December 2017, Apple acquired Shazam for $400 million. The deal was finalized after European regulators investigated the transaction for potential antitrust violations. Investigators ultimately determined that Apple’s deal would not reduce competition in the digital music streaming market.
The 9-figure deal was one of Apple’s largest acquisitions — a telling sign that the company coveted Shazam’s long-term prospects. This deal puts Apple in direct competition with other providers such as Spotify and Pandora. It will be interesting to see how Apple incorporates Shazam’s core functions into its music platforms.
Apple acquiring Shazam makes the blue-chip stock a possible target for investors who enjoy music.
How To Buy Apple Stock
Apple Inc. (NASDAQ: AAPL) is a global company that designs, manufactures and markets mobile communication and media devices and personal computers, and sells a variety of related software, services, accessories and 3rd-party digital content and applications. It has its own operating systems, including iOS, macOS, watchOS and tvOS.
The company faces immense competition from both foreign and domestic companies with significant operating capital and a long-standing track record of providing products and services to a large customer base.
Apple believes one of its major differentiators as a company is the customer buying experience. The company’s retail stores are typically located at high-traffic locations in quality shopping malls and urban shopping districts. By operating its stores and locating them in desirable locations, Apple feels it is better positioned to ensure a high-quality customer buying experience and attract new customers.
To say Apple stock has done well during the 39 years since its initial public offering would be an epic understatement. According to one calculation, if you invested $1,000 in Apple stock on the day of its IPO, December 12, 1980, it would be worth well over $430,000 today, which includes price appreciation and dividends. That says as much about the company’s performance as it does its staying power.
Since the beginning of the pandemic, Apple has split its stock and is seeing 2020 revenues of $294.14 billion. Its 52-week range is $69.25 to $145.09 and the company pays a dividend of $0.82.
Still, a blue-chip stock such as Apple still requires a keen investment eye. The long-held adage that “past performance is no guarantee of future results” applies. Still, Apple could be an impressive addition to your portfolio. Here are some basic steps if you are interested in its stock, which are similar to how to purchase Nintendo stock.
- Conduct Your Research.
Establishing a foundation of knowledge is critical in investing — knowledge of stocks, of brokers, of the process. While it isn’t necessary to get the level of expertise that matches a broker, it does allow you to navigate the process in a way that fuels well informed choices. Part of that basic knowledge is learning how to read a stock market quote. Bottom line: Learn all you can about investing.
- Pick a Broker.
If you’re interested in Apple stock you can either use an online broker or establish an in-person relationship with a local broker. There are a few major differences between these options, the most obvious being the variance in fee structure and commissions. Costs can also vary, so gather as much information before moving forward. Ultimately, though, establishing a comfort level with the right broker is perhaps the most important step toward your investment journey.
- Establish and Build a Relationship with a Broker.
Your broker should know your financial goals and risk tolerance, and you should know and feel comfortable with your broker. If all goes well, your relationship could be long term. If so, there must be a solid rapport. This is an important step and one that could be overlooked and dismissed if your portfolio is doing well.
- Fund an Account.
If you’re opposed to working with a broker, you can establish an online brokerage account. Create an account and link your banking information to transfer funds or wire money into the account. Either way, once the funds are deposited, you’re ready to start trading.
- Finalize Your Apple Stock Purchase.
Apple is traded as AAPL on the NASDAQ. You’re now ready to purchase Apple stock at the current per-share price, less any fees or related costs using either your online or your neighborhood broker.
Best Stock Brokers for Apple Stock
Apple Stock: A Synopsis
Apple acquired Shazam, in part, as a way to fortify its standing in the digital music business. It’s part of the company’s ongoing expansion to discover and deliver digital content and applications through its innovative hardware, software and services. Apple’s massive presence in today’s marketplace is known even by those with no interest or knowledge in stock. Still, the company has incredible brand equity that’s further strengthened by classic tales about its stock, including how on the day of its IPO in December 1980, it created more than 300 millionaires in a single day.
Apple is the first publicly-traded U.S. company to hit $1 trillion market capitalization. But its journey to the top hasn’t always been a smooth one. The company had a string of miscalculations and turnover in leadership, which led to Founder Steve Jobs being ousted in 1985. Years later Apple endured the threat of bankruptcy, a successful restructuring and turnaround — initiating a leaner strategy to meet customer demand — and started to produce a line of winning, innovative products.
The company introduced the iPod in 2001. It sold more than 400 million units and helped turn the music industry on its head. In 2007, the company introduced perhaps one of the more influential products in history with its iPhone. More than 1.5 billion iPhones have been sold since its launch, revolutionizing the way consumers interact with technology.
Apple’s stock price places some investors out of the game. But to those with the resources, it should remain an intriguing investment.