The Most Terrifying Words in Tech: “Apple Is Entering Your Market”
Pandora shares, which were happily surging along just days ago on better-than-expected second-quarter earnings, are today plumbing the depths, dragged down by reports that Apple is working on a competing streaming radio service.
Shares of Pandora plummeted more than 19 percent in early morning trading Friday, falling to $10.15. And that precipitous decline more than erased the 15 percent gain the company’s stock had managed to win over the past three months. Clearly, investors are terrified at Pandora’s prospects in the face of a formidable competitor like Apple — a company whose mobile devices are responsible for a lot of Pandora usage.
“Apple is currently the largest music retailer in the world and the move is likely being made to unseat rapidly growing streaming competitors like Pandora and Spotify,” Bank of America-Merrill Lynch analyst Nat Schindler said in a note to clients this morning. “Apple’s large device installed base makes it a more serious threat than other current or potential competitors. Pandora we believe gets 40-50 percent of its total usage currently from iOS devices.”