Apple Reportedly Refocuses iAd On New Streaming Music Radio Service

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Apple is said to be directing engineering and sales talent from its iAd business, which currently supports mobile display advertising run by Apple on iOS, to help further its new music service offering, which is rumored to be free and ad-supported. Businessweek claims that Apple will unveil the service next week, backing up what we heard yesterday, and that Apple is changing its in-house ad strategy to help businesses build campaigns that address customers as they listen to songs on the new service.

The new report also establishes a timeline for the launch of the “iRadio” service, as the press have dubbed Apple’s streaming plans. It reportedly won’t become available for use by the general public until later this year when iOS 7 is released, Businessweek reports. That’s likely to happen in the fall to coincide with the introduction of a new iPhone expected around that time.

That timeline makes sense, as it doesn’t look like Apple has worked out all the licensing rights for the streaming service just yet, so a release next week would be premature. The company has also pretty generally kept its release of other new media features like iTunes in the Cloud timed to the launch of a new OS, since they likely require more than just a simple app update to integrate deeply with iOS and become a system-wide tool.

Apple is said to be essentially adapting Pandora’s business model for use with its own streaming music service in the new report, and to de-emphasize its current iAd aim of in-app display advertising. The iAd business, which is helmed by Apple SVP Eddy Cue, hasn’t exactly been a break-out hit; Apple has had to cut pricing and change its strategy with the service in the past. Cue is said to be heading up the new change in direction, and the ads on the mobile music service will enable users to stream an unlimited library of content for free.

The streaming selection will be based on a user’s tastes, Businessweek says, with users able to create a station based on a specific song or an artist, and it can pull from a user’s iTunes library to generate suggestions and also offer easy purchase of songs users like. Apple will select a few specific launch advertising partners for the streaming service, and will also continue to use iAd to sell in-app advertising, too, according to the report.

Apple launching a streaming service makes sense, given that Google has just launched its own. Google’s All Access offering is paid, however, not free, and it seems like Apple’s will be based around a model much closer to Pandora, which is likely why Pandora’s stock fell 11 percent by market close yesterday, as rumors of an imminent iRadio launch took root.