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MarketWatch First Take

Pandora playing in a crowded field

NEW YORK (MarketWatch) -- Pandora Media Inc. is up to its elbows in competition, and that could be a problem.

The Internet-radio company's (P) ability to show consumers and Wall Street alike that it is still the best game in town -- if not the only one, by a long shot -- will determine whether Pandora can thrive or wilt in the crowded field.

Pandora has to keep its eyes wide open all around. Spotify has rolled out a free radio service tailored to iPhones and iPads, "directly challenging Pandora," as The Wall Street Journal put it.

"That comes a week after apps by Internet-radio company Songza climbed to the No. 1 and No. 2 spots among downloads for iPads and iPhones [on Apple Inc.'s (AAPL) App Store] and Amazon.Com Inc. (AMZN) rolled out its Cloud Player for iPhone," the Journal noted.

Pandora's counterparts smell blood. They believe they can woo users by providing a better-quality service, or at least something that seems new. In the world of gadgets, sometimes being novel is a marketing advantage.

(AAPL) This is not really a new story. Silicon Valley's littered with entrepreneurs who thought they had a better idea than everyone else, until new foes emerged to give consumers advantages on pricing or convenience or service.

This battle is just beginning.