Why iTunes Radio Is a Smart Move for Apple

In the aftermath of Apple's big keynote on Monday, much of the media attention has been focused on iOS 7. The radical departure from the look and feel Apple users have become accustomed to over the past few years sparked a lively discussion among bloggers, designers and consumers. Among all the buzz surrounding icons and color schemes, one of Apple's announcements went by relatively unnoticed: iTunes Radio.

Apple's ad-supported music streaming service will let users stream individual radio stations based on their taste. iTunes Radio, available only in the United States for now, is strikingly similar to Pandora Internet Radio, a publicly-traded company that will probably end up cursing the day Apple entered its market. But Apple is a profit-oriented company and offering a music streaming service definitely makes sense for the company that already owns the largest digital music store in the world.

Since mobile networks are fast enough to stream high quality music, streaming has become increasingly popular as it obliterates the need to curate and carry around a huge music library. In 2012, 37 billion songs were streamed in the United States. In the first 5 months of 2013 alone, Americans streamed 22 billion songs. That amounts to a lot of listening hours and a lot of ads to be sold. With iTunes Radio, Apple makes sure to get a slice of that increasingly large pie. More importantly, smartphones and tablets are among the preferred devices for music streaming. Right now, many iPhone and iPad owners use third party services to listen to music. iTunes Radio enables Apple to control more of the user experience and to make its mobile ecosystem even more sticky.