Yes you need a smartphone for Pandora, no it is not a subscription, but you are streaming with your phone when you use it. Pandora is a free subscription service.
The manual states the following about accessing Pandora
Requirements to access Pandora using the
Pioneer car audio/video products:
! Please update the firmware of the Pandora appli-
cation to the latest version before use.
! The latest version of the Pandora application can
be downloaded on iTunes App Store.
! Create a free or a paid account online. You can
create the account in the Pandora application
from your iPhone or on the website. The URL in
! If the Data Plan for your iPhone does not provide
for unlimited data usage, additional charges
from your carrier may apply for accessing the
Pandora service via 3G and/or EDGE networks.
! You need to connect to the Internet via 3G, EDGE
or Wi-Fi network to use the service from Pandora.
! Depending on the availability to the Internet, you
may not be able to receive Pandora service.
! Pandora service is subject to change without no-
tice. The service could be affected by any of the
following: firmware versions of iPhone, firmware
versions of Pandora application, changes to the
Pandora music service.
! Certain functions of the Pandora service are not
available when accessing the service through the
Pioneer car audio/video products. They include,
but not limited to the following: creating new sta-
tions, deleting stations, sending information
about current stations, buying tracks from
iTunes, viewing additional text information, log-
ging in to Pandora, adjusting Cell Network Audio
Pandora internet radio is a music service not af-
filiated with Pioneer. More information is avail-
able at http://www.pandora.com.
The Pandora mobile application is available for
most iPhone and smartphone, please visit
www.pandora.com/everywhere/mobile for the
latest compatibility information