Pandora Media Inc (P), Sirius XM Radio Inc (SIRI), Apple Inc. (AAPL): What About That Other Guy?

What About That Other Guy?

In addition to Pandora and Sirius, there’s this other company by the name of Apple Inc. (NASDAQ:AAPL) who’s entering the radio space.

Apple Inc. (NASDAQ:AAPL)’s operating system will be included in (many) vehicles, as will a radio service similar to Pandora. While Apple Inc. (NASDAQ:AAPL)’s new services will be available on iOS and PCs, Pandora still has iOS, BlackBerry, Android, and Windows Mobile. Not to mention, Pandora has a large sales team that focuses solely on local advertising.

Apple Inc. (NASDAQ:AAPL) is not an advertising company, as its Internet radio services are more about strengthening the company’s ecosystem – creating iTune purchases and attracting new iOS users — versus finding advertisers. In the end, Apple’s bread and butter is hardware, and offering products that stand out against Android.

At 12.5 times earnings, I think Apple is an attractive investment opportunity, but not based on the potential of iRadio, and I think this fact is important to remember. Therefore, I don’t think Apple’s presence greatly affects Pandora, especially considering Pandora’s limited presence in vehicles. At this point, Pandora has a large market to gain, and not much to lose in the vehicle market.

With that said, Apple Inc. (NASDAQ:AAPL) could affect Sirius, as this marks a second major competitor along with Pandora. The difference between Pandora and Sirius is that Sirius has the most to lose with 25 million subscribers, being the current vehicle-based radio leader. In the past, it has been quite easy for Sirius to thrive: They had no real competition.

Final thoughts

Personally, I am impressed with Pandora Media Inc (NYSE:P)’s quarter, and I think the company’s entrance into vehicles is an unspoken catalyst that gets little coverage.

Now, I won’t go as far to say that Pandora will stand the test of time, and be relevant in the next decade. However, with current growth, and with its valuation relative to Sirius XM Radio Inc (NASDAQ:SIRI), I think there’s a lot to like.

Perhaps, its post-earnings weakness is an opportunity, or maybe it falls lower after Apple Inc. (NASDAQ:AAPL) launches it service. Either way, I’d keep my eye on this stock for gains over the next year, as further vehicle penetration is observed.

The article Radio Investments: Is This Stock Now a Buy? originally appeared on Fool.com and is written by Brian Nichols.

Brian Nichols owns shares of Apple. The Motley Fool recommends Apple and Pandora Media. The Motley Fool owns shares of Apple.

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