Sirius XM Radio Inc (SIRI), Pandora Media Inc (P), Apple Inc. (AAPL): Where Does iTunes Radio Hurt Most?

Sirius has excelled in creating new subscribers. During its last quarter, subscribers increased 9% to 24.4 million total subscribers. Therefore, much like Pandora controls the mobile listening arena, Sirius controls that in automotive.

Here’s my question: With Apple Inc. (NASDAQ:AAPL)’s new “in the car” service, how many people will view Sirius XM Radio Inc (NASDAQ:SIRI)’s services as necessary? Sirius charges $14.49 per month for its service yet Apple’s service will come standard. Already, Honda, Chevrolet, Mercedes, Kia, Volvo, and six other manufacturers are incorporating it into their new car models starting in 2014.

First off, this could lead consumers to purchase Apple products over Android, due to the integration. Secondly, I think this could deliver a blow to Sirius, especially with Kia and Chevrolet. Sirius XM is a $21.7 billion company that trades at 6.3 times sales with 11% growth. While auto sales are expected to experience continued growth, it’ll be interesting to see if consumers will pay the $14.49 per month when they have Apple in their car and a new-age music platform.

Final Take

Pandora CEO Joseph Kennedy essentially said that Apple Inc. (NASDAQ:AAPL) did not innovate enough to impress the market and steal market share. However, I beg to differ. I think the company’s new smart music service combined with in-car services could be a blockbuster in gaining market share from Android.

Pandora and Sirius XM might be impacted the most – but right now I am still bullish on Pandora Media Inc (NYSE:P) due to its overwhelming subscriber base; more than nine times that of Sirius. In my opinion, Sirius XM Radio Inc (NASDAQ:SIRI)’s success has been due to default, as it benefits from a bull auto market; but with a substantial competitor I find it hard to be quite as bullish moving forward.

The article Where Does iTunes Radio Hurt Most? originally appeared on Fool.com and is written by Brian Nichols.

Brian Nichols owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Brian 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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