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I'm Excited for iRadio, but AAPL Investors Should Not Be

Stocks in this article: AAPL P FB GOOG

NEW YORK ( TheStreet) -- As an unabashed Pandora (P) bull, I'm excited to see Apple's (AAPL) iRadio appear to be so close to reality.

That said, I consider the development from several perspectives.

First, TheStreet has known this was going to happen for a while. Late last year, an incredibly reliable source told me "it's only a matter of time" before Apple enters Internet radio. In April of this year, media outlets ran around confirming the rumor as if it was news.

So, yeah, not much of a surprise that it's going to happen.


That said, I still don't quite understand why. Scratch that. I understand why. I just don't think it makes sense in the grand scheme of things.

On the bright side, it's -- most likely -- fantastic news for consumers.

If Apple has a weakness, it's software. While iOS and OS X are both best of breed, it's the affiliated software and service platforms that leave a bit to be desired. Some are way more mediocre than they should be (e.g., iTunes). Others, such as Ping, flat out failed despite considerable fanfare from Apple ahead of launch.

But I hold out hope Apple will hit a home run with iRadio (though I hope they fool us and call it something else). Even if it's not great, I don't expect it to go the way of Ping.

iRadio will make the Internet radio space richer, providing consumers with even more choice in an already eclectic space. Ironically, it might help Pandora's bottom line. And, although it could sting Pandora a little, Apple's entry could help shake out some of the chaos in the music royalty war that's currently raging.


It's also a win for the music industry. Forget about royalties -- though Apple will pay more per song than Pandora -- and focus on promotion.

Pandora already drives music sales on iTunes. Reportedly, that will be a phenomenon Apple hopes to extend with iRadio. The music industry needs this as services such as Rdio deemphasize music purchases, even if unintentionally. Assuming Apple immediately becomes the No. 1 or No. 2 Internet radio player, the labels will welcome having the top two services focused on personalization and discovery, on the basis of listener tastes, which leads to more record sales on iTunes.

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