Apple Exploring Options In Net Radio (NASDAQ: AAPL)

AppleMany people know Apple as a company that makes some of the finest hardware in the world. Now, Apple is exploring opportunities available in the online music service market. The company will soon unveil its new Internet radio service designed to stream songs over a data connection instead of storing them on a device. The service is expected to be ad supported and free for users.

Apple is hoping to spread this method of listening to music further into the mainstream arena. The new service will put Apple in direct competition with services like Pandora, Spotify and Rdio. Pandora currently has around 200 million registered users. A similar service from Apple could expose more people to online radio and make Apple a dominant global player in the digital music market.

Apple has long been a leader in the music industry. Russ Crupnik, an analyst at NPD Group said, “The genius of iTunes 10 years ago was that they made the mainstream consumer understand what digital music was, and how it all worked.” James McQuivey, an analyst at Forrester Research, says the company will only succeed if they create a service that is better than what is already out there. He said, “It’s going to have to innovate. It can’t just be Pandora with an ‘i’ in front of it or Spotify with an ‘i’ in front of it.”

One of Apple’s most persistent stumbling blocks has been services that rely on an Internet connection. Apple’s social network for discovering music, branded Ping, was abandoned because very few people used it. iCloud, Apple’s service for synchronizing user data across devices, has been criticized for being unreliable, much like its predecessor MobileMe. Apple’s Maps app for iPhones was so bad that the company issued a public apology.

The company is still selling tens of millions of iPhones and iPads, but investors are growing concerned about its profit margins getting tighter and growth slowing. Services like Internet radio could create new opportunities for the company to make money. The company has also redesigned iOS, its software operating system for iPhones and iPads. The overall look will be smoother and elements like the yellow-notepad inspired Notes app and the leather borders in the Calendar app for the iPad are expected to be removed.



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