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At the ongoing annual Worldwide Developers Conference, Apple Inc (AAPL - Analyst Report) unveiled its much anticipated music-streaming service iRadio. Apple also showcased the newly revamped iOS 7 in the ongoing conference, which has a simpler user interface and offers a lot of new features.  

The iRadio service is designed along the lines of the competing Pandora (P - Snapshot Report) service, which allows users to create stations based on songs of their choice (including Twitter trends) which they can also share with friends.

The service offers more than 200 free stations primarily supported by brand advertisements. However, for Apple’s existing cloud-based music service (iTunes Match) subscribers, iRadio is totally advertisement free.

Additionally, iRadio offers cross-platform features, which allow access to users of other platforms such as Pandora and Google’s All Access. Apart from close integration with iTunes, iRadio will also be available on newly launched OS X and Apple TV software.

Apple has closely integrated Siri with iRadio, which will allow users to easily navigate through songs by using voice command. Apple also introduced a number of improvements to Siri, which will now come with a new interface, new voice (both male and female options) and feature Twitter integration.

An important update to Siri is the addition of French and German language options. Apple announced that Siri will now use Microsoft’s (MSFT - Analyst Report) Bing for search queries. Apple is also planning to bring iOS into cars by the end of next of year.

Besides iOS-related updates, Apple also unveiled the new Mac OS X Mavericks, which offers significant improvement in terms of power consumption, efficiency and integration with iOS based devices. The company also introduced iWork for iCloud in the conference, which allow users to work on documents in a browser on either Mac or PC.

Apple also provided a glimpse of its upcoming desktop Mac Pro, which is a black, cylindrical device that includes 12-core Intel Xeon processors and its internal storage, is based on high speed flash memory. The device will be assembled in the United States and is expected to release later this year.

Apple launched new MacBook Airs, which promises improved battery life and supports 802.11 ac, a faster version of wi-fi. The device runs on Intel’s Haswell processor and features new Airport networking devices.

Our Take

Traditionally, Apple has used the Worldwide Developers Conference (“WWDC”) platform to launch new services, hardware products and software. Although nothing exceptional was announced this year, Apple’s entry into the Internet-radio market is worth mentioning.

In this regard, we note that Pandora ranks #3 among the top grossing apps in Apple’s App store and enjoy a first mover’s advantage in the music streaming industry. Therefore, Pandora’s already popular service (approximately 70.1 million users) driven by its effective discovery engine and well established infrastructure will provide significant competition to Apple in the near term.

Additionally, we believe that the lack of new surprises (iWear and iTV) and absence of new iPhone/iPad details has left very little to cheer about this years WWDC conference. We believe that the lack of new innovative products will remain an overhang on Apple’s share price in the near term.

Currently, Apple has a Zacks Rank #4 (Sell).

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