Apple Inc. (AAPL)’s Quest to Kill Pandora Media Inc (P) May Make Itself the Victim

Apple’s iconic founder, Steve Jobs, was never one to shy away from making his products obsolete.

In the 1980s, the original Macintosh may have cannibalized sales of the company’s other PCs, like the Lisa. More recently, it is undeniable that the iPhone rendered the iPod largely obsolete.

Jobs has been quoted as sayingthat “if anybody’s going to make our products obsolete, I want it to be us.”

Perhaps then that is why Apple is willing to step into the Internet radio game, even if it hurts their larger iTunes business. As consumers gain increasing access to high speed Internet connections, via their smartphones or other devices, the appeal of streaming music online becomes more attractive.

In the wake of this shift, companies that provide this service have flourished: not only Pandora, but also Spotify and Rhapsody.

Pandora, Spotify and Rhapsody all offer slightly different experiences for consumers. Pandora focuses on radio stations tailored to a listener’s preferences; Spotify and Rhapsody allow the user to listen to just about any song they want anytime they want (Spotify differentiates itself from Rhapsody with a social networking component).

Who’s to say that Apple must follow what these companies have done? Perhaps the Cupertino tech giant has something else up its sleeve.

Apple could sell radio stations individually

A new clue in the ongoing Apple radio saga turned up Tuesday. Users discovered that Apple had hidden new graphical icons within its latest software update for the iPad. These buttons are unlike anything Apple has used before, but appear to suggest radio functionality.

9to5Mac speculates that the buttons might be used to purchase individual radio stations based on a particular song or artist.

That would be a novel twist, but it would protect Apple’siTunes business to some extent. Rather than having a library full of purchased songs, users would have a library full of purchased radio stations.

Perhaps that is what Apple will do. On the surface, such an option doesn’t seem particularly appealing: Why purchase individual radio stations when a consumer can get access to the best of Pandora for a relatively paltry $3.99 per month?

Maybe Apple plans to sell such stations for pennies, but anything nearing $0.99 would seem to tip the balance back in favor of Pandora.

At any rate, the entire concept remains incredibly speculative. Still, given the persistence of the rumor (and Tuesday’s uncovering of the icons) it seems highly likely that an Apple Internet radio is in the works. How that will affect the larger company, or its shareholders, remains to be seen.

The article Apple’s Quest to Kill Pandora May Make Itself the Victim originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

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