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The One Thing Apple Could Do to Absolutely Devastate Pandora

Stocks in this article: AAPLP

I remove the Pandora app from the App Store.

Ever since iTunes Radio was a rumor, I argued Apple would not do such a thing. Plenty of reasons existed -- and still exist -- for it not to.

First, Pandora remains a top grossing app in the App Store. At last check, it's number four. Second, lots of people love Pandora. There's a loyalty between the Pandora user and the platform. No doubt about it. So, if Apple yanks Pandora, it would lose money and probably face considerable backlash from iOS users.

That said, Apple probably wouldn't lose that much revenue by forgoing the cut it receives every time a Pandora listener makes an in-app purchase on an iPhone or iPad to become a Pandora One subscriber. Nobody knows for certain how much Apple makes off of Pandora in the App Store, but I'm confident when I say it probably doesn't even amount to a pimple on Tim Cook's backside. It's likely pocket change to Apple.

As far as the backlash goes ... I've been through radio station format changes a million times. I've seen legendary stations come and go. When the switch gets flipped and a crowd favorite goes away, there's intense outrage. But it usually only lasts for days. Sometimes weeks. In rare instances, months. Apple jettisoning Pandora from iOS is akin, in terms of the emotional aftermath, to the format flip in traditional radio. 

Apple could not only weather that storm, it could prepare for it. It could provide some sort of perk to iOS users who will lose the ability to access the Pandora app on their iPhone or iPad. If Apple wants to continue to (misguidedly) try to keep music downloads alive, it could provide freebies to buy songs in iTunes. Or, better yet, it could offer a gift card for use in the iTunes or the App Store to any disgruntled (former) Pandora user that wants one.

Bottom line -- Apple has options. Pandora doesn't.

If Pandora thinks it could fall back on Android after getting booted from iOS, its CEO has less sense than I thought he did in the first place.

Apple hasn't even introduced the large-screen Android-killing iPhone 6 yet iOS continues to gain domestic marketshare as Android loses it. And, remember, that's (pretty much) Pandora's only game -- the US.

So the timing is ripe for Apple to take the most drastic measure of all drastic measures ... it's gaining on Android on the eve of introducing a smartphone (or two) that will help it eat away at if not completely eliminate Android's lead. Very few people would drop their iPhone simply because Pandora's gone from it. Too many other options exist to justify the switch. And lots of present Android folks will soon be switching to what will be an irresistible iPhone 6.

The more I think about this, the more it sounds like an absolute no-brainer. And, sadly, as far as I know there's nothing Pandora could do about it. If people at Pandora are reading this, the thought must turn their stomachs. If they're reading this at Apple (particularly in the iTunes wing of the building!), they've got to be wondering why this hasn't happened yet. 

Imagine if this went down ... we would instantly stop questioning if Tim Cook has the killer instinct Steve Jobs was known for during his hyper-aggressive reign at Apple.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is a full-time columnist for TheStreet. He lives in Santa Monica. Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
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