Apple Inc. (AAPL): Why It Should Launch a Music Service Like Pandora Media Inc (P)

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Though Pandora Media Inc (NYSE:P)’s 200 million registered users are noteworthy, that number still pales compared to Apple’s more than 500 million iTunes subscribers. Furthermore, as Pandora Media Inc (NYSE:P) continues to spend more cash than it takes in, Apple has a $100 billion plus cash hoard and formidable cash-generating abilities, taking in $0.28 in free cash flow on every dollar of sales.

If Apple launches iRadio — and it has plenty of reasons to do so — it will likely be too small to meaningfully impact Apple’s bottom line, but it will definitely threaten Pandora Media Inc (NYSE:P)’s business. Though it is possible Pandora could survive an iRadio, I’d rather not speculate. For now, investors should avoid Pandora shares, and wait to see how things play out.

The article Why Apple Should Launch a Pandora-Like Music Service originally appeared on Fool.com and is written by Daniel Sparks.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com and Apple.

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