With streaming music a quickly growing activity for mobile users, the news that Apple is interested in creating its own music streaming service a la Pandora and Spotify could have significant implications for these players as well Android, which presumably will not have access to the service.

Recent mobile growth for music streaming services such as Pandora and Spotify suggests the opportunity to deliver mobile musical experiences extends beyond purchasing and to discovery as well. However, while Pandora is struggling to monetize its growing mobile user base, Apple?s business model is likely to be different.

?Apple is in the music business to make its device products better, whereas for Pandora music is the product,? said Aapo Markkanen, London-based senior analyst for devices, applications and content at ABI Research. ?That?s why Apple will be satisfied if it breaks even, give or take.

?If Apple did want to actually make meaningful profit from music it would face the same key dilemma as Pandora: the licensing costs undermine the scale benefits that streaming services can achieve,? he said.

A broader music strategy
Recent reports suggest Apple is engaged in talks with several record labels about the necessary licensing agreements for a streaming radio service that would be customizable, a la Pandora and Spotify.

The combination of Apple?s iTunes with a streaming music service is likely to make Apple an even more important powerhouse in the world of digital music.

While any such service is likely months away from being announced, it will reportedly be available on iPhones and iPads as well as for desktop.

However, the Apple streaming music service will not be available on Android devices. As a result, any such service might give consumers another reason to purchase an iPhone over an Android device.

Apple understands the important role that music plays in mobile users? media consumption habits and wants a bigger piece of pie. The technology company?s current strategy lets users buy music and listen to what they have purchased but it is not as strong when it comes to discovery.

?It?s about the limitations of the current iTunes music model, which is based on ownership of music. It doesn?t allow you to discover new music or spontaneously listen to artists you might like,? Mr. Markkanen said.

A differentiated experience
Apple already owns a significant percentage of the hardware that users listen to music on with the iPhone and iPod. Offering a music streaming service would create a more cohesive and robust product offering for the company and, as a result, could be strong out of the gate.

As a result, it could pose a significant challenge to Pandora and Spotify.

?I?m not sure why Apple wouldn?t look to acquire an existing service vs. creating something from scratch,? said Lily Triantafillou, partner and digital media director at MediaCom, New York.

?If Apple is able to secure more talent rights with their heft, they have a good chance of converting Pandora/Spotify users,? she said. ?If I were Pandora/Spotify, I would be concerned.?

One of the challenges Apple will face, just as Pandora and others do, is the cost of securing rights for talent with record labels.

However, Apple may be able to use its significant influence to negotiate more talent rights than the competition. Apple does need to be careful of not using its weight too much or it might run afoul of regulators as it has in the book publishing industry, where several publishers and the Dept. of Justice recently reached an agreement over claims of ebook price fixing that arose from a pricing strategy initiated by Apple.

By coming late to the music streaming game, Apple may benefit from being able to offer a more differentiated experience.

?Apple has the opportunity to provide a better music service and drive additional purchases of music through one-click experience,? said Brenda Fiala, senior vice president of strategy at Blast Radius, New York.

?Apple's entry, with its install base of 300+ million iOS users and 400 million iTunes account holders, has a high probability of making a significant impact on subscription and ad-based music streaming services available today,? she said.

?The reach and recommendation engine of Apple could become a powerful determinant of whose music gets heard more often.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York