Forbes reported Monday that Apple Inc. (NASDAQ: AAPL), which offers its iTunes Radio as a rival to Pandora, may finally be ready to launch an iTunes Radio app for Google Inc.’s (NASDAQ: GOOG) Android. Apple has limited its apps to its own devices. But, given its declining market share, stagnant stock price and the failure of iTunes Radio to offer real competition to Pandora, it may be time for a new strategy on Apple’s part. By offering the iTunes app for Android, Apple hopes to significantly broaden its reach.
Billboard also reported late Friday on rumors that Apple was in talks with senior music label executives about launching an entirely new, Spotify-like music streaming subscription service.
In addition, Pandora recently revealed its plan raise the fees for its ad-free service by $1.00 to almost $4.99 and to move yearly subscribers to a monthly plan. In the face of the increasing costs of licensing songs, Pandora had little other choice but to raise its fees. Analysts expect the rate hike may adversely affect the subscription base of the company, thereby leading to a reduction in growth and profitability of the company going forward.
Pandora reported a 16% annual growth rate in listener-hours for the current quarter, down from 17% and 18%, respectively in the previous two quarters, as well as 23% last year. Clearly Pandora’s core business is slowing down, and that is worrying investors.
Shares were down about 10.2% to $30.52 in late morning trading. The 52-week trading range is $12.66 to $40.44.