Current rumors sugges that Apple may be looking to compete with Pandora. Apple is currently said to working out deals with a few music labels in preperation of launching their radio service. It can be easily predicited that Apple's internet radio service could outshine existing competitors since most users already use their devices on a regular basis and have an iTunes account. Apple radio will most likely be a mix of Spotify and Pandora, but better. A short coming of Pandora is that it does not allow its users more than 5 skips on a given station. Pandora is currently on top as the most popular Internet radio service.
Rumors have been circulating all over tech blogs ever since late August that Apple will be launching a new radio service. Apple radio could end up being similar to an iTunes version 2 as it will most likely be a desktop app and avaialble on all Apple iOS devices, rather than as a web service.
Pandora has already faced competition from other internet radio services, but it is more than likely that Apple will position their service in such a way that blow them out of the water. Apple could be Pandora's biggest threat yet, because of the licensing agreements that Apple already has in place for its music offered. If these rumors are in fact true, we can expect to see Apples new radio service launched in lieu of a new product such as iPods or a new version of iTunes. Apple's internet radio service would be a great source for even more revenue, as it will be easy to download tracks electronically.