Will Google Inc (GOOG) and Apple Inc. (AAPL) Eat Pandora Media Inc (P)’s Lunch?

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Ultimately, I think Google Inc (NASDAQ:GOOG) doesn’t see All Access as a major revenue source — they just want to make back their licensing fees. Thus the service becomes more about  rounding out Google Inc (NASDAQ:GOOG)’s offerings. For those with Android phones or tablets, Google Inc (NASDAQ:GOOG) is building out their complete package for all your music-streaming needs. And I think that makes Google a strong prospect in the long term.

The newest player

Apple Inc. (NASDAQ:AAPL) is crafting a similar strategy — although at $24.99 a year, iTunes Radio comes in at just over $2 a month. And for those who still find that a little rich, there is a free, ad-supported service not unlike Pandora’s.

Apple Inc. (NASDAQ:AAPL) has a number of built-in advantages in this market. With over a 500 million active iTunes users, it’s got a treasure trove of listening data from years of being the world’s biggest internet music service. It has hundreds of millions of iPhones that are already tightly integrated with iTunes. And 400 million of those iTunes users have credit cards in iTunes, meaning they are ready and willing to buy the stuff Apple spins. Of course, the same advantages could be said of Ping, Apple’s failed foray into the social networking space.

But selling music is what iTunes is all about, and iTunes Radio should be a huge boon to Apple in that regard. The company’s lack of fragmentation and strong upgrade numbers means it will have plenty of users updating their devices to iOS 7 when the time comes, and with it, plenty of listeners eager to check out iTunes Radio.

The bottom line

Although it’s been a strong contender and will continue to be in the short- to medium-term, I think Pandora is likely to see a decline as two companies who already entertain consumers in other realms make inroads with internet radio.

Google’s All Access is a strange beast, and may not generate the number of users Google Inc (NASDAQ:GOOG) is looking for. But the company’s made a strong push into internet music already, and All Access rounds out those offerings.

Apple Inc. (NASDAQ:AAPL)’s new iTunes Radio is set up to succeed, as long as the integration is as tight as was promised at WWDC. It’s another example of a more realistic Apple willing to keep up with the Joneses — or in this case, the Brins and Pages — and that should hearten concerned Apple investors.

The article Will Google and Apple Eat Pandora’s Lunch? originally appeared on Fool.com and is written by Steven Yenzer.

Steven Yenzer owns shares of Apple. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google. Steven is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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