Samsung Acquires Mobile Entertainment And Music Streaming Startup mSpot
Samsung Electronics has acquired mobile entertainment startup mSpot, according to a release issued today. Financial terms were not disclosed, but previous reports point to an acquisition price of $8.8 million.
Context & Ripple Effects
mSpot spent late 2010 proving out a cloud-based streaming-and-syncing music service, launching first on the iPhone via an app covered in December of that year bringing cloud streaming to iPhones. Today Samsung bought the company outright for a reported $8.8 million — a small price by acquisition standards, but one that hands the world's biggest TV maker and a surging smartphone vendor an in-house music streaming stack.
The deal lands while Samsung holds confirmed momentum against Apple: a March 2012 report put its China market share at three times Apple's and growing. Pickup across The Next Web, GigaOM, and Business Wire signals that analysts read this less as a talent buy than as Samsung assembling a services layer around its devices.
First-order effects
- Samsung gains mSpot's cloud music streaming and syncing technology in-house, giving it a capability to bundle directly into Galaxy phones and tablets rather than license from a third party.
- mSpot's cross-platform service — which deliberately reached iPhone users first in December 2010 — now answers to a hardware rival of Apple's, ending its neutral-platform position.
Second-order effects
- Apple, the competitor Samsung's China lead has already tripled against this year, faces a rival that can ship devices pre-loaded with owned music software instead of relying on partner apps.
- Music rights holders and label negotiators gain one more device-maker seeking streaming licenses, tightening competition for content deals alongside established services.
Third-order effects
- A sub-$10 million exit to a strategic buyer shows how handset leaders clear small software startups off the board cheaply before they become distribution threats or partner assets.
- If the pattern holds, device differentiation migrates toward bundled services layers, pushing hardware companies into repeated capability acquisitions rather than organic software development.
The trend: Smartphone makers are buying content-streaming startups outright to convert handsets into services platforms — Samsung's mSpot purchase is one data point in a capability-acquisition race among device giants.