Pandora's Moving Forward with Toyota

Pandora Media (NYSE: P  ) wants to take you out for a test drive.

The personalized radio service operator announced today that Toyota (NYSE: TM  ) is offering an embedded version of Pandora on the 2012 Camry and 2012 Tacoma vehicles that are just starting to hit showrooms.

We've known that Pandora was going to be part of Toyota's Entune platform since January, but now we're seeing that it's available in the country's best-selling car and the top-selling compact pickup truck.

Ford (NYSE: F  ) has offered voice-activated access to Pandora through its SYNC AppLink platform for some time, but Toyota's making it even easier.

As long as someone in the car has a smartphone -- and the Entune app currently supports iPhone, BlackBerry, and Android -- the handset's data plan can be used to stream Pandora through the car's audio system.

Entune is slicker than you probably think. The car's center console lights up with big app buttons for Microsoft's (Nasdaq: MSFT  ) Bing for search and directions, OpenTable (Nasdaq: OPEN  ) for dining reservations, MovieTickets.com for multiplex tickets, and streaming access to Pandora and iHeartRadio.

If Sirius XM Radio (Nasdaq: SIRI  ) isn't trembling with fear it's because the satellite radio giant has been striking market-widening deals of its own. Sirius XM announced a new deal with Nissan and Infiniti this morning, offering three months of access for pre-owned cars sold by the dealers with existing receivers.

Sirius XM also offers dealerships financial incentives that Pandora will not be able to match.

However, Toyota knows that it can't ignore Pandora's appeal when it comes to selling new cars. Pandora's revenue soared 117% in its latest quarter, as the music-discovery site served up 1.8 billion listener hours. Pandora's explosive popularity -- and the ubiquitous nature of the top three smartphone platforms -- make it easy to offer drivers a growing array of free options on the wireless carriers' bandwidth.

If Toyota misses out on a few XM subscriber activations because drivers upgraded their old cars to new Camry and Tacoma vehicles with Entune it's a trade it will gladly make.

The next few months will be crucial. Is Entune the seamless platform to beat? Is it buggy? The ability to use the car's radio dashboard to select Pandora stations, skip songs, and rate songs to get even better recommendations is something that terrestrial and satellite radio operators can't ignore.

If you want to see how the premium and streaming radio wars play out, consider tracking SIRIUS XM Radio and Pandora Media through My Watchlist.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story, except for Ford. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

The Motley Fool owns shares of Ford Motor and Microsoft. Motley Fool newsletter services have recommended buying shares of Microsoft, OpenTable, and Ford Motor. Motley Fool newsletter services have recommended creating a bull call spread position in Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (5) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 06, 2011, at 2:54 PM, 67vair wrote:

    Doesn't sound very promising to me. More jukebox junk. Not real radio. No content to compare to Sirius.

  • Report this Comment On October 06, 2011, at 4:31 PM, Brent2223 wrote:

    It's a step in the right direction for P in terms of ease of use/dashboard integration, but SIRI is already there. P is still lacking the breadth of content SIRI has, and I think iHeartRadio is actually becoming more of a threat to SIRI here as it's introducing more than just music. And the whole concept of P being 'free' is debatable as long as it needs a data plan. For the 'road warriors' spending several hours daily in the car I still think that SIRI provides the best bang for your buck. From an investment perspective SIRI knows how to make money and is doing it - there are definite threats out there but SIRI is still the 500 lb gorilla in the room in the short term.

  • Report this Comment On October 06, 2011, at 4:55 PM, sirifire wrote:

    I am just curiuos how Pandora is going to justify internet radio costs in the dash. Do they want me to read ad banners while driving? Or maybe they want me to listen to their ads??? Then how do they differ from terrestrial radio that I cannot stand exactly for this reason. Funny, isn't it? But the most ludicrous thing is that the herd boutght into it!!!

  • Report this Comment On October 07, 2011, at 4:43 PM, stanboygreen wrote:

    I don't care if I have to listen to ads. The Pandora ads are created in a way that's very different from the cheesy irritating commercials played on Terrestrial radio. I used to work in radio and guess who has to write the copy? That's why radio ads are sooo annoying. Pandora does it better and makes the listening of ads tolerable. Now if they could just make them more relevant it would be awesome.

  • Report this Comment On October 11, 2011, at 11:10 PM, MHedgeFundTrader wrote:

    Today Toyota, the world’s largest car maker, has been slammed by the perfect storm that has taken its shares down a gut churning 60% from its 2008 peak. They took eight years to find a defect in an American made accelerator component that caused thousands of accidents, and dozens of deaths, forcing a worldwide recall of 10 million vehicles.

    To me, this all adds up to a great screaming “BUY.” You can start with the recall, the largest in history, covering eight models, which promises to be speedy, lavish and generous. It prompted a production shut down, an unprecedented measure in auto history. The company is going all out to reinforce customer loyalty. Toyota still makes great cars. And let’s face it, many people would rather die than drive an American car.

    There are a few additional angles here. Since the company is Japan’s largest exporter, it would benefit greatly from any weakness in the yen, which I consider as the world’s most overpriced currency. Think of the stock as a long dated yen put. Look at the charts for Ford, US cars sales, and the palladium used for catalytic converters, and it is obvious that the world is seeing a surge in global car sales.

    I know the philosophy, and the strengths of this company intimately, and they will come roaring back. Let the ruckus over the recall burn out, and add Toyota to your “buy on dips” list. Keep in mind that this is not a day trade, but something to bury in your portfolio and then lose behind the radiator. It will also not be immune from the calamities that strike the stock market.

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