Shares of Internet radio provider Pandora (P) tumbled more than 9% in Friday morning trading after it posted quarterly results that topped analysts’ expectations, but changed a user policy in the face the looming market entry of a new rival.
Pandora announced on Thursday that it will end its restriction on the number of hours that non-subscribers can listen to its ad-supported service on mobile devices. Earlier this year, the company had placed a limit of 40 hours per month on those users, the Los Angeles Times notes.
The company cited rising revenue from subscribers as the reason for ending the cap. However, Pandora is about to get some big competition in the form of Apple‘s (AAPL) iTunes radio, a free, ad-supported service, which is expected to launch in September.
Apple’s entry to the Internet radio market comes as Pandora is facing increased competition from rivals like Spotify and a new on-demand service from Google (GOOG).
Pandora also announced second-quarter adjusted earnings of 4 cents a share, topping the 2 cents predicted by analysts. Quarterly revenue of $157.4 million also beat the $156 million that analysts had forecast.