Tomahawk, WI 04/17/2014 (Basicsmedia) – Will more competition in the internet radio and music streaming business be good? The answer will clearly depend on who you put the question to. For consumers, more competition might well be a good thing but for existing players like Sirius XM Holdings Inc. (NASDAQ:SIRI), it poses growth challenges.

David vs. Goliath

If Apple Inc. (NASDAQ:AAPL) makes a serious challenge to the likes of Sirius, Apple will be the giant David in that competition. After all, we know how Steve Jobs transformed many businesses including the music distribution business by often making the content companies bend to his will.

Apple has already its CarPlay system that will be available as original equipment in many marquee luxury auto brands such as Mercedes and Ferrari. Other automakers will follow soon.

Apple is also planning to launch a Spotify-like on-demand music service. With the slowdown in its iTunes music store, Apple might be interested in doing something revolutionary such as launching iTunes for Android.

Apple Inc. (NASDAQ:AAPL) recently announced an agreement with National Public Radio (NPR) which will make it more than just a music service provider.

Sirius Steps

Sirius XM Holdings Inc. (NASDAQ:SIRI) is not lying still and waiting to be run over by either Apple or the other big internet radio and music streaming service provider Pandora Media Inc (NYSE:P). With exclusive partnerships, Sirius is going to provide extensive coverage of the 2014 MLB season and the US PGA Tour on SiriusXM PGA Tour Radio.

It recently added two new channels to its lineup.

For a company that generates most of its revenue from paid subscribers, its new deal with Avis Budget Group Inc. (NASDAQ:CAR) should earn more revenue and profits just like its existing deal with rental giant Hertz Global Holdings, Inc. (NYSE:HTZ).

Financial Picture

Sirius reported 4Q2013 revenues of $1.0 billion and $3.8 billion in revenues for FY2013. It reported $65 million and $377 million in net income for 4Q2013 and FY2013 respectively. It has a solid paying subscriber base of 21.1 million.

Both S&P and Moody’s have recently upgraded their ratings on Sirius XM’s senior notes to investment grade which is a big deal for Sirius considering that its debt once carried a junk rating.

Is it time for Sirius XM Holdings Inc. (NASDAQ:SIRI) to consider acquiring Pandora to “take on” the looming competition from Apple?

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