But, get this, the Apple Store located just a few blocks from me in Santa Monica, Calif., generated $352 million in sales in fiscal 2011, according to MacDailyNews. That's almost a million bucks a day. And that's just one store.
The revenue Apple would derive from ad-supported streaming radio (or a subscription service for that matter) doesn't amount to beans. It's not worth the hassle or the very real risk that it will be a flop.
It takes more than the flip of a switch to credibly challenge Pandora in this area. The company dominates Internet radio listening with a two-year head start in building out a local sales team to tap the $14 billion traditional radio ad market.
Plus, it does personalization and discovery incredibly well; you cannot duplicate the Music Genome Project, a complex and beyond-obsessive algorithm more than a decade in the making, overnight.All of that said, whatever goes down will go down. It might require a long memory, but remember this: If Apple does a service that competes head on or in spots with Pandora, it will be a long-term net positive for Pandora. Not even Apple can stop Pandora's growth in the space, both from ratings and ad revenue perspectives. If you assess Apple vs. Pandora on the surface, you'll snap that I'm insane. However, If you truly study what Pandora does and why it leads Web radio by such a wide margin with a strong first-mover advantage in mobile use and advertising, the picture looks a heck of a lot clearer. Purely on noise and legislative uncertainty, I can't say you should buy Pandora shares now. Trade it if you're nimble or accumulate on crashes and write covered calls, although my near-term sentiment might change as we get deep into 2013. Follow @rocco_thestreet
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV