Apple Inc. (AAPL)’s Pandora Media Inc (P)-like Services

At its Worldwide Developers Conference, Apple Inc. (NASDAQ:AAPL) made it very clear that they believe they are innovative. They released information regarding their new online streaming radio service, iTunes Radio. It offers many of the same services as the oldest and most successful online radio service Pandora Media Inc (NYSE:P), but is it any better? Let’s take a look at what this service offers, how it will effect competition, and what may surprise some people.

What is it?

The service works similarly to Pandora’s, with a few more specific features. For instance, the demo showed options on songs such as, “Never play this song again” and “Play more songs like this.” While these features are nice, they certainly are not earth shattering breakthroughs. Because of its ties to iTunes, you also have the option to buy whatever song you are listening to just by clicking a buy option at the top right hand corner.

One thing that may surprise people is the lack of subscription fees for the service. Instead of following in the footsteps of Google Inc (NASDAQ:GOOG) and charging a monthly fee of $7.99, Apple Inc. (NASDAQ:AAPL)’s iTunes Radio services will be free. Google Play Music All Access does offer commercial free radio, playlists, and streaming of your favorite songs for all subscribers. Apple’s service will offer the same basic set-up, allowing specific songs, playlists, or stations.

Competition

This release is likely to increase competition to a whole new level for this branch of business. Apple seems to have a good start because of its faithful users in every other area. If Apple Inc. (NASDAQ:AAPL) offers a new service, they are bound to immediately have millions of users. Both Apple and Google Inc (NASDAQ:GOOG) have music stores and cash to invest. This again seems to present them with an upper hand against Pandora. Pandora, however, seems to have paved the way for these other companies. Neither Google Inc (NASDAQ:GOOG) or Apple Inc. (NASDAQ:AAPL) have done anything to seriously set their radio services apart.

Pandora Media Inc (NYSE:P) needs to do something that will allow it to stay relevant. The most obvious solution is to become the most personalized online radio service available. If they can engage their users in personalizing their favorite music, they could continue to be the industry leaders.

Performance

Pandora Media Inc (NYSE:P) is a much younger company than either Google or Apple Inc. (NASDAQ:AAPL), but it has performed far better than some might have expected. Apple’s stock has experienced rough times over the past year, but they are the only ones (of the three companies) paying dividends. In the past year, Google’s shareholders have seen more growth than either of the other two, but Pandora is a close second.

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