Apple's announcement Monday that it Is launching a streaming-music service not only underwhelmed many observers, it sent shares of iTunes Radio's new top competitor, Pandora Media, climbing.
Apple officially jumped into the online-radio business during its Worldwide Developers Conference in San Francisco. ITunes Radio shares many features with other Web-radio products, such as letting users create stations based on preferences.
"In terms of features they talked about, it was a little underwhelming," said Douglas Anmuth, an analyst at JPMorgan Securities LLC in New York. "They didn't give a whole lot of details." The music service, which will be supported by advertising and aimed at driving new song purchases through iTunes, was part of a sweeping redesign of Apple's iOS mobile operating system that Chief Executive Tim Cook unveiled at the conference.
ITunes Radio will be available later this year when iOS 7 is rolled out to users.
Shares of Apple fell less than 1 percent to $438.89 at Monday's close in New York, leaving them down 37 percent from a record in September. Pandora rose 2.5 percent to $15.49, and is up 69 percent this year.
"ITunes has expanded and extended its radio feature to match what other services have offered for years," Joe Kennedy, CEO of Oakland, Calif.-based Pandora, said in an interview. Pandora has more than 200 million registered users, he said.
By adding new services and delivering software upgrades, Apple, based in Cupertino, California, is seeking to blunt the advance of Google Inc.'s Android mobile operating system, which now runs on 74 percent of smartphones, compared with Apple's 18 percent in the first quarter, according to research-firm Gartner Inc. IPhone sales climbed about 16 percent in the first quarter, lagging the smartphone market, which grew 43 percent.
Pandora's app is available on Android, iOS and on any computer with a Web browser, as well many television set-top boxes, while iTunes Radio isn't available on Android.
During the developers conference, Apple also rolled out a new mobile operating system with a different aesthetic and multi-tasking that allows users to preview what an app is doing.
The company also launched new MacBook Air models, previewed upcoming MacPro desktop features and introduced a version of its iWork software suite that operates in a browser window. An update of personal assistant Siri on iPhone and iPad will make it smarter and more powerful, executives said.
The new system, OS7, features fresh icons, buttons and color schemes on a glass-like, semitransparent background and redesigns of Apple's apps such as Mail, Calendar and Weather with complementary designs. It is expected to go public in the fall.
Apple also updated its operating system for its desktop and laptop computers. Unlike previous versions named after breeds of cats like Mountain Lion or Snow Leopard, the latest system is named OSX Mavericks, evoking a California surfing hot spot.
Craig Federighi, Apple's senior vice president of software engineering, said OSX Mavericks will have technology that cuts activity by the central processing unit by 72 percent, in part by letting apps "take a nap."
The new operating system also introduces iCloud Keychain, a feature that encrypts passwords for websites, Wi-Fi networks and credit cards and will compete against stand-alone programs like LastPass and DashLane.
OSX Mavericks will include an integrated Maps program that can seamlessly transfer maps to an iPhone or iPad. Apple's Maps program received a lukewarm reception when it was introduced on the iPhone, prompting Cook to apologize to customers.
Executives touted a refreshed MacBook Air as having all-day battery life thanks in part to Intel's new Haswell chip set. The 11-inch model's battery life will go from five hours to nine hours, and the 13-inch version will go from seven hours to 13 hours, they said. The new models will start shipping Monday.
Apple also offered a "sneak peek" at features of a new MacPro desktop. The release date was not specified for the MacPro, which presenters said will feature twice the performance of the existing model.
Cook said the company is introducing a version of its iWork productivity suite that works with iCloud in a browser, giving users access to word-processing, spreadsheet and presentation documents via the Internet.
Another new feature: iPhone and iPad apps can be updated automatically without requiring user intervention.
A new Activation lock anti-theft feature built into iOS will prevent thieves from wiping and reactivating iPhones and iPads and reselling them.
The announcements set the stage for more product introductions later in the year, when analysts predict that Apple will unveil a new iPhone and iPad.
"There is no way Apple will exit the year without new iPhones and new iPads," said Bajarin. He also expects the company to introduce a new MacBook Pro laptop.