Pandora Media shares plummeted by as much as 18% on Friday following a rumor that Apple is working on a rival radio service.
The Wall Street Journal reported on Thursday night that Apple is in talks to license music to create a free ad-supported radio service that works on mobile devices, Macs and PCs, just like Pandora. The report was enough to send Pandora's stock spiraling down as low as $10 a share Friday morning from its previous day's close of $12.57.
In the past year, Pandora has experienced increased competition in the online radio market from Spotify's radio feature and Clear Channel's IHeartRadio app. However, Apple may pose a particularly grave threat to the company.
Pandora has long been one of the most popular apps on the iPhone and iPad, but if Apple decided to release a radio service as a pre-installed app on these devices, it could cut into the demand for Pandora.
We reached out to Pandora for comment on Apple's rumored radio service, but a spokesperson declined to comment.