Is Apple Performing

Apple (AAPL) has been making headlines for the right reasons of late. The worldwide launch of the new iPhone 5S and the iPhone 5C was incredibly successful as the company sold a record nine million iPhones in just three days. Evidently, Apple's move to add China to its first day recepients of the iPhone paid off and the company was able to smash analyst estimates. Also, Apple's launch of iOS 7 has also been a success, and the embedded streaming radio service called iTunes Radio is turning out to be the most intresting addition to the new operating system.

This new service may not have been making much news, but it is rapidly making a big impact on the market and it poses a big risk to Pandora (P). A decade ago, the late Steve Jobs claimed that subscription-based music will never catch on, but now, it looks like his assessment was incorrect and it's obvious from the success of streaming music apps such as Spotify that people want to rent their music rather than own.

So, the obvious question that arises is -- can Apple's iTunes Radio top Pandora? We'll get to that later, but first let's take a look at the two companies' financial performance recently.

Recent performance

The second quarter was extremely successful for Pandora as the company's revenue jumped 58% year-over-year to $162 million. On the earnings front, the company registered an EPS of $0.04. The growth in Pandora's margins was driven by its mobile business, which grew 92% from last year. As a result, Pandora's shares have appreciated roughly 185% in 2013.

Apple's quarterly performance was according to expectations. Apple registered an increment of 1% in its top line, but the company's earnings nosedived 22%, as compared to the corresponding quarter of preceding year owing to margin pressure from the iPad mini and higher sales of older iPhone models.