Pandora Radio currently has 150 million users and accounts for 74% of all online radio usage. It is this success that has attracted the attention of the ever-expanding Apple Company. There have been reports that imply Apple is considering creating its own online radio application that would directly compete with Pandora. Analyst Richard Tullo predicts that Apple would earn 20 million users within its online radio’s debut year if the reports proved to be true. While Apple is looking to compete with Pandora, companies like Google, Amazon, and Clear Channel want to buy out the online radio company for various reasons.
Google would be able to increase its advertisements and its offerings on the computer, Android, and tablets, making these products more appealing. By doing this, Google would be able to gain more revenue per user. Amazon’s intention is to enhance its Kindle Fire tablet and give this product more marketable features. Pandora would expand Amazon’s online radio usage, securing the company revenue it is lacking. The broadcaster Clear Channel doesn’t need a revenue booster, but does need a new appealing aspect for its business. Clear Channel owns the iHeart Radio online radio service, but with only 17 million users it would be a stretch to consider iHeart a serious threat to Pandora’s monopoly. Owning Pandora would mean enhancing online radio service for Clear Channel’s broadcasting business.
Apple’s successful products have transformed its brand name into a lifestyle for many consumers. Today, 51% of U.S. households own at least one Apple product, whether it is a MacBook, iPhone, iPod, or iPad. The second a new product is released the public is all over it. Since the iPhone 5 was released in September it has already sold over 5 million units and 83% of the buyers were previous iPhone owners who chose to upgrade. It is this reputation, success, and efficiency that other companies like Google, Amazon, and Clear Channel strive for. Clearly, it would make sense for other firms in the same business as Apple to attempt to follow Apple’s lead in whatever endeavor was next on its list.
Although this supports Tullo’s interpretation, it is possible that Google, Amazon, and Clear Channel could just be trying to enhance their business with no respect to Apple’s choices whatsoever. Pandora Radio is a very successful online radio company whose 214% revenue increase within the next two years is a result of effective strategies to earn profit from advertisers as well as subscribers. The numbers that Pandora has produced is understandably attractive to businesses looking to add new, marketable aspects to their products and services. It could be this natural inclination that persuades Apple, Google, Amazon, and Clear Channel to encroach on Pandora’s service, or Pandora could be the “Apple” of these companies’ eyes for competitive reasons.
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