Ever since Steve Jobs has passed, Apple has been making a few mistakes, mistakes that should have never happened. Now, Tim Cook and the heads at Apple are thinking about iRadio. Internet Radio is the future but iRadio is the wrong way to go about it. First and foremost, Apple makes great products, but has no experience in broadcasting, which is a completely different market altogether. (Remember the Google maps fiasco?) Pandora currently owns a 75% market-share of the web radio space and it also has deals with over a dozen automakers, including BMW, Ford, Honda, and Toyota, to provide in-dash functionality. Also, an Apple iRadio would not work on Androids and other smart phones. At a current valuation of $1.6b, a Pandora buyout makes more sense than anything else in the web radio business. Unless Apple makes an immediate move to acquire Pandora, then Google or Facebook will beat them to it.
You can bet that the music industry will work with an Apple/Pandora Radio to negotiate a fair deal.
Wake up Tim Cook!
I love Apple and I love Pandora.
Sentiment: Strong Buy
With a Market Cap of $16b Sirius is way too expensive and Liberty Media will never sell. Pandora's Market Cap, on the other hand, is currently only at $1.6b
Also, Sirius/XM depends on the life-span of their three very expensive satellites that will need to be replaced in the near future. Pandora's model has been tested, it has 175,000,000 subscribers and anyone that tries it, loves it. I currently subscribe to both Sirius and Pandora, yet the only reason I still subscribe to Sirius is for CNN, FOX, CNBC, BLOOMBERG and Howard Stern. IMHO, I think that now the Mel Karmazin has left as CEO of Sirius/XM, if AAPL ends up acquiring Pandora, they will bring in Mel as their CEO. Mel was the one who turned Sirius/XM into a $16b company and he will do the same to Pandora.
I predict that a Pandora/Apple Radio will have music, news channels, a pay-per-listen Howard Stern Channel, Podcasts and much, much more. Keep in mind that Pandora also uses great quality video commercials on all smart phones, so the possibilities are ENDLESS!!!
I guess someone at Forbes liked my post:
"Instead, Apple needs to focus on its TV ambitions, which I’ve said should include the Facebook “like” button. The company should start focusing on ways to dominate the smarthome and the smartcar – perhaps making a bid for a company such as Sirius XM or Pandora. The smartphone market has become too saturate, especially with Research In Motion’s resurgence and Amazon’s entry into the market."
The issue with acquiring Sirius/XM is that Liberty Media has taken full control of Sirius and there is no way they will sell it. Panodra, on the other hand, is already one of the top downloaded apps on iPhone and all other smartphone. The "Like"feature is already incorporated and EVERYONE LOVES PANDORA!
Great post!! I think Apple and many other top tier companies (like Exxon) are sitting on as much cash as possible and waiting for the overall world economy to stretch out a bit more. It makes more sense to do aggressive acquisitions when the economy shows signs of continued growth. Apple is in an unbelievably strong position. It can just keep hoarding cash, no debt, and wait to acquire when the time is right. Hang in there!