• by Erik Sass  @eriksass1, January 7, 2010

Furthering the convergence of Internet with mobile devices -- in this case, cars -- Pandora, the popular online music service, announced a deal with electronics manufacturer Pioneer Corp. that will allow consumers to bring Pandora's personalized audio content to their automobiles.

As in many other cases, convergence here promises greater convenience and choice for consumers. But it also guarantees a showdown with other digital audio service providers -- namely satellite and HD digital radio, already battling each other for the all-important dashboard turf.

According to Pandora, Pioneer has begun manufacturing a multipurpose navigation and media device, priced at $1,200, which will allow consumers who own iPhones to stream the online music service to their car stereos via the mobile devices -- after they download a new app that lets the devices link up.

The Pandora audio play is also identified in a text display on the Pioneer device's screen, which allows the driver to interact with various media options and view a GPS display of their route, among other capabilities.

On Pioneer's part, the move demonstrates the ease with which consumer electronics manufacturers can evolve to match changing media consumption patterns, as well as enable them. But for competing media content owners and distributors, it represents yet another source of competition.

Traditional radio broadcasters have gradually seen their dominant position in drive-time listening eroded by new rivals.

The first threat came from satellite radio; Sirius-XM is now focused on factory-installed satellite radio sets in new cars as the main area for recruiting new subscribers. Traditional AM-FM broadcasters viewed this threat seriously enough that when Sirius and XM proposed their controversial merger in 2007, the former demanded the satcasters cancel their agreements with carmakers as a condition for the merger going forward.

After regulators rejected this suggestion, AM-FM radio broadcasters have focused on promoting HD digital radio as a free alternative to satellite radio's subscription service. But HD radio sales have been sluggish, with a total installed base of about 1 million at the end of 2009. Such numbers prompted the AM-FM broadcasters -- like Sirius-XM -- to turn to pre-installed sets in cars for increased market penetration.