Will Apple Inc. (AAPL) Cripple Pandora Media Inc (P) Here?

Will Apple destroy Pandora?

I have no advance knowledge of Apple’s plans for its WWDC. As I wrote in my original post, if iRadio is a no-show — or if it takes a radically different form from the one that’s been reported — Pandora’s shares should see a strong move higher, particularly because it has a short interest near 20%.

But, over the long-term, Apple has the resources to undermine much of Pandora’s business. After all, a great deal of Pandora’s users are listening to the service from an Apple device.

If one believes that the MGP is so great that it sets Pandora apart from its competitors, then investing in the company might not be a bad move. Given the short interest, there is a large block of the investing community that agrees with me. A block that should (in theory) be proven wrong over time.

As that happens, shorts will get squeezed, and the stock will continue to power higher.

But if you believe the uniqueness of the MGP is over-hyped — that the process of generating playlists just isn’t that complicated — then it’s hard to see Pandora’s long-term viability. When you get down to it, it’s an unprofitable company facing a new competitor seemingly every month.

Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple.

The article Will Apple Cripple Pandora at the WWDC? originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.

Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.