Earlier this week, Apple (NASDAQ:AAPL) announced the introduction of iTunes Radio, the company's latest foray into the service side of the business. While Apple has historically struggled as a service provider, the streaming music service promises to challenge the dominance of Pandora (NYSE:P). The service will be primarily offered as a free, ad-supported app, but users who want to take advantage of cloud storage for $29 can get an ad-free version. One estimate suggests that at even a small conversion rate, iTunes Radio could generate as much as $1 billion in annual revenue.

In the following video, Fool.com contributor Doug Ehrman discusses what the introduction of this new offering from Apple could mean for Pandora

Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.