Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of music-streaming specialist Pandora Media (NYSE: P ) fell by 12% during intraday trading Monday on worries that Apple's (NASDAQ: AAPL ) iTunes Radio could pose a bigger threat than expected.
So what: In a press release Monday, Apple not only stated that it sold a record-breaking 9 million iPhones during the weekend, but it also noted that an incredible 200 million iOS devices are now running the newly released iOS 7, which introduces iTunes Radio as part of its redesign. All told, Apple says, 11 million unique listeners have already tuned in to iTunes Radio since its launch last Wednesday.
Now what: That's a pretty impressive debut when, by comparison, Pandora last month said its active users during the second quarter grew 30% year over year to 71.2 million. If Apple can keep up this kind of momentum, it seems a safe bet iTunes Radio could quickly surpass even Pandora's impressive reach.
If any meaningful number of Pandora's user base decides it likes Apple's solution better, it could singlehandedly thwart Pandora's already-difficult goals for reaching sustained profitability. In the end, I certainly can't blame investors for staying on the sidelines until Pandora can prove to everyone there's room for two streaming-music juggernauts in today's market.
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