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
Pandora has won millions of devotees among music fans but few supporters on Wall Street. The online jukebox seems to be redefining the way we consume music, a transformation that's only likely to grow. But high royalty rates and competition from all corners threatens to silence the company. Can Pandora translate success with its listeners into a prosperous business model that will deliver for investors? Learn about the key opportunities and potential pitfalls facing the upstart radio streamer in The Motley Fool's premium research report. All you have to do is click here now to subscribe to this invaluable investor's resource.