Has Apple Found the Last Missing Piece for iRadio?

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Will this year’s Worldwide Developers Conference host the debut of Apple’s (NASDAQ:AAPL) long-awaited music streaming service? The chances of seeing an iRadio unveiling at this year’s WWDC just got a little better after Apple was able to sign on Sony (NYSE:SNE) Music for the rumored music streaming service.

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Sony Music was the last major music label that was holding out in negotiations with Apple over royalty payments and other fees. The first major music label that Apple was able to sign up was Universal Music, which is also the largest of the major record labels. Apple inked a deal with Universal Music in April and it was hoped that this breakthrough deal might lead to the other labels following suit.

Apple was finally able to agree to a deal with Warner Music last weekend. However, one significant holdout that remains is Sony/ATV, the music publishing company owned jointly by Sony and the estate of Michael Jackson.

Now that Apple has Sony Music on board, it has achieved deals with all three major record labels for its iRadio service. Apple’s proposed music streaming service is rumored to combine elements of Pandora’s (NYSE:P) ad-based service along with some Spotify-like on-demand features. It will likely work in combination with Apple’s paid  iTunes download business by allowing users to purchase songs through iTunes that they hear on iRadio.

Although Apple has now laid the foundation for iRadio, some commentators expect that the service still won’t be ready by June 10 when the WWDC kicks off. According to All Things D, Apple will instead probably just announce the service to give developers a sense of how iRadio will function.

Whether or not the Apple is planning a full-fledged launch or merely an announcement, the iRadio is likely to be a commercial success. Morgan Stanley’s Katy Huberty estimates that if only 40 percent of Apple’s current user base embraces iRadio, the service could potentially generate $883 million in annual revenue for the company. However, if 50 percent of Apple’s user base adopts iRadio, this could mean potential annual revenues of $1.1 billion.

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This year’s WWDC begins on Monday, June 10 at the Moscone Center in San Francisco and runs until Friday, June 14. Here’s how Apple has been trading so far this week.

Follow Nathanael on Twitter (@ArnoldEtan_WSCS)

Don’t Miss: 5 Things to Expect From Apple’s WWDC.