Longview

What: Shares of Internet radio company Pandora (NYSE:P) slumped 16.8% during the month of June, according to S&P Capital IQ data. Both Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG)(NASDAQ:GOOGL) announced new music services in June, increasing competition at a time when Pandora has yet to turn a profit.

So what: The biggest news of the month in the world of streaming music was the announcement of Apple Music, a $9.99 per-month subscription service that comes with a three-month free trial. Launched on June 30 in over 100 countries, Apple Music uses real people and algorithms to curate music, and early reviews have been largely positive.

Recognizing the reach of Android, Apple Music will also launch on Google's mobile platform later this year. Other than an Android app developed by Apple to help people switch to iOS, this will be the first time Apple has supported Android with any of its services. Had Apple kept Apple Music exclusive to iOS, the threat to Pandora and other music streaming services would have been minimized.

Apple Music doesn't offer a free ad-supported service like Pandora, so those unwilling to pay a subscription fee won't make the switch. However, Google, which has offered a monthly subscription music service for a couple of years, added a free ad-supported option in June, offering a direct alternative to Pandora's service. Google's service will also feature playlists curated by human editors.

Now what: Competition in the music streaming business has always been fierce, and despite Pandora being one of the most popular services, the company has yet to figure out how to turn a profit. Apple's entry into the business, and Google's new free service, pose a serious threat to Pandora.

Pandora's growth is also slowing. After more than doubling revenue in 2014 as the company focused on better monetizing its service, Pandora expects revenue growth to slow to roughly 28% in 2015. Losses are expected to continue as well, and based on Pandora's guidance for EBITDA, the company's net loss will likely grow in 2015 compared to last year.

If Pandora couldn't earn a profit before Apple and Google got serious about music streaming, it's difficult to imagine the company reaching profitability now. Investors are clearly concerned about the long-term prospects of Pandora in light of this new competition, sending the stock tumbling in June.

Timothy Green has no position in any stocks mentioned. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Pandora Media. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Pandora Media. 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.