Apple Inc. (NASDAQ: AAPL) may have finally rolled out the real death sentence of Pandora Media, Inc. (NYSE: P). Pandora shares have tanked in late afternoon trading ahead of Apple's earnings. The reason for the tank is that Apple and music labels are being reported as rolling out an ad-based internet radio service in 2013.
If that is the case, then Pandora's genome and band-focused music station business model is going to become that much more challenged. One consideration is here too that maybe iTunes is not growing much any longer. If Apple is getting into the radio business, maybe it feels like it has milked the music world for most of what it can in individual song sales.
Bloomberg TV said that the reported launch is 2013 and the deal's details would be agreed to in November. One fair question to ask is what this means for the Apple iTunes business. It is obvious what this could do to terrestrial radio.
Pandora shares hit the 10% drop that triggered a halt via the NYSE circuit breakers. Pandora shares are now down over 14% at $7.90 and today will be all-time lows for Pandora.
Another stock sliding on the news is SIRIUS XM Radio Inc. (NASDAQ: SIRI). If this gets into cars, obviously Apple would have a much better chance with its track record of unseating SIRIUS XM than Pandora has been able to do. Still, that remains speculation at this point. SIRIUS shares are down 3% at $2.79 so far in late afternoon trading.
JON C. OGG
Filed under: 24/7 Wall St. Wire, Internet, Media Tagged: AAPL, P, SIRI