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Satellite Radio Eyeing Major Growth

Las Vegas – Satellite radio providers XM and Sirius used the 2005 International Consumer Electronics Show here to outline a bold agenda for market expansion. Both introduced new products and programming for the new year.

XM unveiled a major push into the home audio market via its Connect and Play initiative, which consists of an XM-ready chip and data port. More than 10 major home entertainment equipment providers have agreed to incorporate XM’s technology and logo into such appliances as DVD players, stereos and boomboxes.

Customers will have to connect a $50 XM home antenna to their devices to play and display the programming. This replaces the need for more expensive XM-specific home tuners, which cost more than $300. Participating manufacturers include Boston Acoustics, Crosley, Denon, Eton, GPX, Harman Kardon, LG Electronics, Onkyo, Orient Power, Pioneer and Polk Audio.

Additionally, XM announced two new models of its XM2go portable receiver, from Pioneer and Giant International’s Tao. Together with Delphi’s MyFi, XM now boasts three portable receiver partners, and expects to announce others later in the year. The new devices are expected to hit stores this spring and retail for $350.

XM also said that Panasonic will provide 13 models of XM-ready car stereo head units this year, with additional units expected from Audiobahn and Pyle as well.

On the programming front, XM announced the signings of talk show hosts Dr. Laura Schlessinger and G. Gordon Liddy, as well as Fox baseball anchor Kevin Kennedy and “Pardon the Interruption” co-host Tony Kornheiser.


XM grew by 1.8 million subscribers, or 130 percent, in 2004, reaching 3.2 million by year’s end. CEO Hugh Panero said he anticipates this year’s growth to be even greater.

“We expect XM will end 2005 with 5.5 million subscribers, furthering our position as the big dog in satellite radio,” he said, an obvious jab at competitor Sirius.

But Sirius has racked up some impressive numbers as well, with a reported 300 percent growth rate in 2004. It also unveiled a variety of new receiver systems in expectation of doubling its current subscriber figure of 1.1 million by year’s end.

Howard Stern’s arrival at Sirius in 2006 is expected to provide the bulk of this growth; Ford’s recent announcement that it will offer Sirius as a factory-installed option in more than 21 model lines is also likely to bolster numbers. Ford’s goal is to deliver 1 million new subscribers in the next two years.

At the top of the heap of new receivers is the ReGo (record and go), manufactured by XACT. It features four hours of internal memory for pausing, rewinding and fast-forwarding buffered content. It is also an MP3 player, the first satellite radio receiver to serve this function, and contains an SD memory slot and USB connection for transferring digital music files.

Other new Sirius-branded devices include the Sportster Reply, with 44 minutes of internal buffer recording capability, and the Star Mate, a palm-size unit that will be available this month for $130. Sirius hopes to soon match XM with a portable receiver of its own.

Competitive sparring aside, Sirius and XM are united in their efforts to expand the satellite radio business. This past holiday season proved highly lucrative for both, with XM tallying 50,000 new subscribers on Christmas alone.

“We are growing faster than where the industry is,” Sirius CEO Mel Karmazin said. “We believe we will be even bigger than most analysts and investors think this industry is going.”

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