Apple has acquired start-up Topsy Labs, a social media and analytics company, which specializes in analyzing data from Twitter to track customer preferences and provide insights on varied topics.
While Apple did not disclose the amount for which the deal was struck, the company reportedly purchased Topsy Labs for an alleged $200 million per the WSJ's sources.
The acquisition of San Francisco-based Topsy Labs has raised speculations why Apple, which is primarily hardware-focused, is venturing into social networking.
Apparently, Topsy is among the few companies that have access to Twitter's data stream. The searchable database of all tweets that were sent were created by Topsy Labs. This figure reportedly amounts to more than 400 billion since Twitter's launch in 2006.
Apple has confirmed the purchase but has not revealed why it bought the company.
"Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans," said spokeswoman Kristin Huguet.
Experts are of the opinion that Apple may be looking to use data analytics for several purposes, including a better placement of its devices across social media.
"There are millions of people sharing their thoughts on platforms such as Twitter on any given day," said Sanjana Chappalli, Asia-Pac head of LEWIS Pulse to the BBC. "For companies to be able to understand what is popular with these users and what they are interested in, and then use it to their advantage, they need to filter the content and understand it."
Analysts are also of the opinion that Apple may be looking to give a boost to its customer-facing software and, therefore, Topsy can be used to serve app recommendations to its users.
"From an usage perspective, they can use it for the app store and iTunes," said Gartner analyst Carolina Milanesi. "With apps, it is really difficult to find good recommendations. It's much harder to see what people use and why."
Apple, the most valuable company in the world, often makes "bolt-on" acquisitions, which are basically small deals to buy technology which it can integrate into existing or future devices.
Of late, several of Apple's acquisitions have been attempts at improving its hardware. Earlier this year, Apple reportedly acquired Israeli 3D chip developer PrimeSense Ltd for $350 million to imbibe gesture technology into its products.
Some analysts opine that with the purchase of Topsy, Apple would gain access to its data which could benefit it and its partners especially companies that provide content for the iTunes store, iOS app developers and advertisers in iAd.
"All of these businesses would appreciate having access to more of this real-time data," said Debra Aho Williamson, principal analyst at eMarketer. "Now Apple has a new tool to help the companies that use its services become better, smarter marketers."
Yet another possibility is that Apple could use Topsy's technology to refine searches in its voice assistant Siri.
With the purpose of Topsy's acquisition by Apple still shrouded in mystery, it remains to be seen what the Cupertino giant finally uses its capabilities for.
