Apple working on Pandora rival?

Apple is reportedly planning to build out a streaming music service that could be a rival to things like Pandora or Slacker Radio. 

The Wall Street Journal reports that the iPhone maker wants to create a service that streams customized music stations to users and it will be free and ad-supported. I'd assume it would have some option to remove the ads with a subscription plan. 

This type of service could make sense for Apple because it already has a lot of deals with music companies through its iTunes service. Creating a streaming radio-like service would require new negotiations, but one assumes that Apple has enough clout and money to get this done if it really wanted to. 

The real question is: Why would Apple need a Pandora clone? 

If you assume that this Pandora-like service would be exclusive to iOS, an Apple streaming music service could make its iPhone, iPod and iPad more appealing to consumers. If this was preloaded on the devices, you could easily see Apple making cool commercials about this like it did for FaceTime. The ad component could also be a slightly interesting angle for Apple, as its iAd program hasn't set the world on fire. 

Pandora itself has a market cap of about $2 billion so some are wondering if Apple will just buy it outright. I sincerely doubt that will happen because Apple generally likes to buy smaller companies and then build out its own services -- look at its purchase of Siri. 

Of course, this could just be another Apple rumor that doesn't pan out, as pundits point out some variation of this rumor always appears before Apple's Fall event. That's not to say the report is false, it could just be that Apple is always looking into this type of service but it never gets far.   

[Via The Wall Street Journal]