Apple's app could compete with Internet radio king

Automakers make room for Pandora

Apple's app could compete with Internet radio king

Pandora dominates Internet radio. Apple CarPlay, below, features iTunes Radio.
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Internet radio is starting to look like a must-have infotainment feature, judging by the number of Pandora users.

This fall, 150 car and truck models will have infotainment systems equipped to play and display Pandora, says George Lynch, vice president of Pandora Media Inc.'s automotive business development.

The company in Oakland, Calif., now counts 76 million users, including a large and growing number of motorists. The company's expansion into the automotive sector "really went crazy in the past year," Lynch said.

Internet radio gives motorists music and other programming from a variety of online sources via a data provider, such as Verizon.

Although a number of Internet radio apps have emerged in recent years, Pandora -- the Internet radio industry's granddaddy at age 14 -- dominates the segment.

According to a consumer survey by Edison Research and Triton Digital, 31 percent of those polled had listened to Pandora in the previous month. Nine percent had listened to iHeartRadio, followed by iTunes Radio at 8 percent.

The survey, conducted in February, polled 2,023 people about their listening habits in and out of the car.

Although Pandora is the leading Internet radio provider, other audio options still have a strong following.

Fifty-eight percent of motorists said they listen to AM/FM radio "almost all of the time" or "most of the time" in the car.

Fifteen percent said they listened to CD players; 13 percent listened to MP3 players, 11 percent listened to satellite radio, and 6 percent listened all or most of the time to Internet radio.

So it would be misleading to compare Pandora to other Internet radio providers only, as motorists are sampling a variety of formats.

"Everybody is our competitor," Lynch acknowledged.

While that may be true, Apple may be the rival that Pandora must worry about the most. Apple appears to be positioning its iTunes Radio app -- which debuted last September -- as a competitor to Pandora.

Ferrari was the first to sell a car with Apple's CarPlay system.

During the Geneva auto show in March, Apple introduced its CarPlay in-car infotainment system, which includes navigation, text messages, Internet radio, voice-activated phone calls and a selection of third-party apps.

CarPlay featured Spotify and iHeartRadio as well as iTunes Radio, but not Pandora. (Android Auto, which will debut at the end of this year, will offer Pandora.) Google with Android and Apple provide the two dominant smartphone operating systems.

Will Apple's iTunes Radio nudge Pandora aside? So far, Pandora executives have been careful not to pick a fight with Apple, which still features Pandora in its online app store.

"We've had a good relationship with Apple," Lynch said. "We have not seen a full implementation of CarPlay yet. We haven't really seen their complete rollout."

With a few exceptions, automakers have made room in their cockpits for Pandora, along with Apple and Android.

The auto industry will let motorists decide what they want to listen to.

You can reach David Sedgwick at dsedgwick@crain.com.


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