Apps & Mobile

UPDATE: Pandora Stock Fell 17% Friday In Wake Of Apple’s Reported Music Streaming Service

Pandora-stock(UPDATE 2) With word of Apple’s development of a
Pandora-like music service
out, Pandora’s stock began to feel
the aftershocks. As of 9:40am PST Friday morning, Pandora stock fell 2.37% to
$10.24, which represented more than an 18% drop in early trading.
Even though it was an up day for the overall market, Pandora stock closed Friday down $2.10‎ to $10.47, a fall of 16.71%‎.


While Pandora takes a hit on Wall Street,
Apple’s stock conversely looks much more positive. As of this morning, Apple
broke $680 for the first time ever, due in large part to the anticipation of
their September 12th launch of the iPhone 5 (and possibly an iPad
mini). Apple’s market cap has now risen above $635 billion. Apple's closing price on Friday: $680.50, +$4.23‎ (0.63%‎)

Apple’s decision to create a music
service and enter the streaming market “could shake up the sector,” said
analyst Nat Schindler
with Bank of America Merrill Lynch.

"Apple is currently the largest
music retailer in the world and the move is likely being made to unseat rapidly
growing streaming competitors like Pandora and Spotify," he continued.

Schindler mentions that if
Apple promotes its own service on its devices (which it likely will), Pandora
can be in real trouble.

"Pandora currently has
72 percent-plus market share of online radio and six percent share of the total
radio market, partially due to its near ubiquitous device reach on over 400
different devices," he said. “Apple's large device installed base makes it
a more serious threat than other current or potential competitors. Pandora we
believe gets 40-50 percent of its total usage currently from iOS devices."

It is yet to be seen how news of Apple’s
music service phases the competition, but considering how massively wide an audience
Apple already has and the dollars behind the development, it is likely that Apple
users and fans will gravitate towards whatever the company has in store. However, it will also be highly important for Apple to clearly demonstrate how and why their service is enough to convert a Pandora or Spotify streamer into an Apple one. 

Hisham Dahud is a Senior Analyst for Hypebot.com. Additionally, he is the head of Business Development for Fame House and an independent musician. Follow him on Twitter: @HishamDahud

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