How Apple Inc. (NASDAQ:AAPL) is hurting Pandora Media Inc. (NYSE:P)
Apple announced that it had sold a record breaking 9 million phones in 3 days, since Friday. The company’s shares rose and in its wake Pandora Media Inc (NYSE:P) shares did a major dip. In Monday’s trading session, Pandora Media Inc (NYSE:P) stock plunged by 10.11%. The opening price of the shares was 426.29 which reached an intraday high of $26.42 and dropped to a close of $24.26.
The Apple Inc. (NASDAQ:AAPL) connection
Now, what exactly does Apple iPhone sales have to do with the internet radio service that Pandora Media Inc (NYSE:P) provides? Well, though the two companies are not in competition in the smartphone market, Apple Inc. (NASDAQ:AAPL) very recently launched its iTunes Radio service and is directly in competition with the former, on that front.
ITunes Radio was launched only last Wednesday and the company said that in under a week it already has 11m unique listeners. That number seems to be an impressive one. Pandora Media Inc (NYSE:P) is the market leader in the space and as per its August report, had 72.1m active listeners. This is a 28% rise from what the listener base stood at, last year.
The core of the Apple issue
If this is the case, then Pandora Media Inc (NYSE:P) doesn’t really have much to get its feathers ruffled about, right? The fact is that around 50% of its users access the Pandora service through any iOS-based device. This also indicates that Apple’s appearance on the streaming video platform will lead to a 10-15% dip in Pandora Media Inc (NYSE:P)’s current listening-hours within a period of 6 months. And so, any rise in Apple’s popularity will affect the company adversely.
Pandora Media Inc (NYSE:P) is an online radio based in the U.S. As of 31 January 2012, it had more than 125M registered users. The company’s Music Genome Project and playlist-generating algorithms are able to predict listener’s music preferences and play music-content that matches the tastes of every individual listener.