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iTunes Radio Preview Hints at Surprises (Update 1)

Updated from 11:10 a.m. ET to provide analyst comments and updated stock price in the fifth paragraph.

NEW YORK ( TheStreet) -- Apple's (AAPL - Get Report) iTunes Radio received much of the fanfare and press at its developer conference last month. Initial reports indicated the streaming service was just a "me-too" effort, but it may be much more.

Initially, I said iTunes Radio was a lot like Pandora's (P - Get Report) service, which is already one of the top free apps in Apple's App Store, and the leader in the Internet streaming service segment. I did notice some subtle differences, however. It has a nicer user interface than what Pandora offers on the initial demo. And iTunes Radio integrates songs you've previously purchased from iTunes, which is a nice addition for the hundreds, or perhaps thousands, of songs already in your library.

Research firm BTIG has demoed the service, and from the looks of it, perhaps initial reports were wrong about it being a "me-too" offering. Maybe Pandora, Spotify, and to a much lesser extent, Google (GOOG), with its Google Play All Access Music service, do have something to worry about.

BTIG's Rich Greenfield issued a note regarding Pandora, saying Apple has picked up its game with iTunes Radio. In the research note, he noted there was an increased amount of content from the original beta, as well as a much better, "and increasingly accurate/fast Siri performance." He mentioned there were no "annoying pop-ups display ads like you find in Pandora." Greenfield rates Pandora shares "sell."

Shares of Pandora were lower in Wednesday trading, off 7.18% to $18.24 on heavier than normal volume.

Here's a YouTube video of the research firm demoing the service.

-- Written by Chris Ciaccia in New York

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