On June 10, techies, analysts, and investors descended on San Francisco, or on their laptops, for the biggest event of the year: Apple Inc. (NASDAQ:AAPL)’s Worldwide Developers Conference. This is the day that Apple gets to roll out its latest upgrades and new entries into the market. Given that it’s Apple, there are always grand expectations for the latest in what the Geniuses have cooked up for the world this time, and of course getting the typical applause as people walk away with baited breath and the sale dates on their iPhone calendars.
This year was pretty significant, because Apple was releasing some of the biggest upgrades in nearly a decade for its iPhone and the Macbook, not to mention the much touted streaming music service. This long pause has been criticized by many analysts, myself included, as Apple Inc. (NASDAQ:AAPL)’s stock, and reputation, took a beating over the last year. From the Senate tax avoidance hearings to its Samsung lawsuit, it’s been tough for Tim Cook and the gang recently. But now the wait is over, the new stuff has been released, and it’s time to wipe off the drool from our keyboards and look at everything objectively.
Given what Apple rolled out today, it shows how really far behind Apple was in the tech war up until now.
It’s Called iTunes Radio
Yes, that is the name of the new streaming music service that Apple Inc. (NASDAQ:AAPL) launched today. A little unoriginal, but it’s an unmistakably Apple product. It will have 200 free stations for the user, and is part of the new iOS 7 software for the iPhone (but more on that later). Given the recently acquired record deals, it looks like a strong entrant into the streaming music market, and should get Apple loyalists on board with the product once it is released on the new software.
The question though about this service though is simple: Is This the Pandora Media Inc (NYSE:P) Killer?
Pandora Still Stands
As some of the readers may know, I have defended Pandora on this website against the doomsayers a number of times. This is because, despite Apple Inc. (NASDAQ:AAPL)’s royal status in the tech world, it has to try to be better than Pandora Media Inc (NYSE:P) to be successful at streaming music, which is a rare role reversal in the tech world thanks to Pandora’s status as industry pioneer. Given what is known about the product, there is no reason for me to believe that Pandora won’t still be the gold standard in online music streaming.
Sure, Pandora Media Inc (NYSE:P) isn’t as massive as Apple, and it doesn’t have the history that Apple has with the music business, I get that. But the naysayers forget that Pandora has benefited from being a “first-mover” in the industry. Any follow-up service must do better than them, and Pandora hasn’t made it easy to catch up with its latest multi-platform push. Apple Inc. (NASDAQ:AAPL) has to be better than Pandora for it to actually be a “Pandora-killer” and so far, it seems like it’s just a copycat.
According to tech analyst Jan Dawson, iTunes Radio is just a “Pandora clone,” and there is “not much reason to switch” from either Pandora Media Inc (NYSE:P) or Spotify to this new service because you’re getting the same thing for a bit more money (it’s free, but you can pay $25/year for no ads, more than the $10/year fee Pandora charges). Why make the switch to the same service, just with more flare?
So it looks like Pandora need not worry, Apple could only copy what they do, and while it may have a bigger library for the moment, there isn’t much else to suggest that it will dominate the market in the near future.
iOS 7
The biggest change is probably the new operating system for the iPhone, the iOS 7, which makes a lot of significant changes to how a phone operates. The most ubiquitous comment was that it is “flatter” than previous versions, giving users the chance to navigate Internet pages in a flipbook style format similar to the one seen on the new Samsung Galaxy S4. In addition, it updates apps without needing to go into the App Store and download them, also prominent on most Android phones. Even the Helvetica font type is similar to what is seen on the Android, as well as streamlined calendar and messaging services. The iCloud Keychain is now functional for all synced Mac devices, which is a convenience bonus, but nothing that gets me all lathered up.
Apple Inc. (NASDAQ:AAPL) has ground to make up with this new gadget, and it should help close the gap between the iOS and the Android. Currently, the smartphone market is dominated by Google Inc (NASDAQ:GOOG)’s Android, 74% to iOS’ 18%. Granted, Google has a range of companies carrying the Android software, while the iOS is Apple only, so closing the gap won’t be completely done, but the new interface should help with the gap.
Copying Android’s features though seems a bit of a letdown from Apple, though it could be because they recognize why Androids are so popular, and Apple’s dormant decade has allowed its competition to get pretty far ahead, and they have a lot of ground to make up.
Market Reaction
For all the fanfare of this conference, Apple Inc. (NASDAQ:AAPL)’s stock actually dipped by 0.6% over the course of the day, despite a strong open at $444.73/share. It stayed up for much of the day before dropping in late trading and ending in the red. Depending how the rest of the week turns out, it doesn’t look like a ringing endorsement of Apple’s changes thus far.
Pandora Media Inc (NYSE:P), meanwhile, started the day down, and many people expected it to continue to fall once the “Pandora-killer” was announced and people started to fall in love with it. At an open of $14.80/share, it fell to a low of $14.43/share before rallying at around the same time Apple was falling. Pandora closed up 2.45% at $15.49/share. This would indicate that investors were getting ready to hop on the iTunes Radio bandwagon and off the Pandora bandwagon, but it turned out just to be eager buzz before reality set in that the best Apple can do is what Pandora Media Inc (NYSE:P) has been doing for a whole decade.
Google Inc (NASDAQ:GOOG), Apple Inc. (NASDAQ:AAPL)’s biggest smartphone competitor, also had a late-day bounce after a sluggish start. It rose $2/share around the same time Pandora and Apple went in separate directions to close at $890.22/share, a 1.19% increase on the day. According to Google’s investors it seems there isn’t anything that unnerved them about Apple’s big day, though it’s worth pointing out that Google Inc (NASDAQ:GOOG) wasn’t the supposed Apple victim today. Google’s front office, though, is probably chuckling that Apple’s new iOS 7 bears a striking resemblance to the Android software that Google Inc (NASDAQ:GOOG) has put out for years.
The Foolish Bottom Line
For all the flash Apple brought with it this afternoon, it only reinforced the notion that Apple is the laggard in the tech world after a lost decade. By showing off improvements that are only new to Apple and not the wider industry, it is clear that Apple’s role as tech pioneer is, for the moment, gone. By mimicking Android for iOS 7, and mimicking Pandora Media Inc (NYSE:P) for its iTunes Radio, it’s more of a testament to those two companies than it is to Apple. It may satisfy the Apple fans, but it’s been a snoozer for everyone else.
John McKenna has no position in any stocks mentioned. The Motley Fool recommends Apple Inc. (NASDAQ:AAPL) and Google. The Motley Fool owns shares of Apple and Google Inc (NASDAQ:GOOG).
The article Pandora Killer? More Like Pandora Copycat originally appeared on Fool.com.
John is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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