Audiovox Corporation (Nasdaq: VOXX) announced today that they have reached an agreement in principle with SIRIUS XM Satellite Radio (Nasdaq: SIRI), which promises to make Audiovox the principal supplier of satellite radio products to the North American aftermarket.
The deal, once the distribution agreement is finalized, will make Audiovox a major warehousing, distribution, and logistics partner to satellite radio. Audiovox is no stranger to the satellite radio world, having worked with both Sirius and XM in the past. That past and present relationship should help keep the retail channel more stable going forward.
Patrick Lavelle, President and CEO of Audiovox sees this as a major move for the company, stating, "This is yet another major milestone for our Company as it further strengthens our leading position in the satellite radio category. Despite the current economic climate, satellite radio is still growing and we believe it will continue to be a prominent form of consumer entertainment. With this agreement, we expect our satellite radio sales to more than double next year with limited exposure. We look forward to partnering with SIRIUS XM in this next phase of their corporate evolution."
Directed bowed out of the satellite radio sector earlier this year. At the time it was rumored that New Age would play a role in SDARS, but that seems to have fallen by the wayside, at least for the time being.
For consumers, this is likely a good piece of news. Audiovox has wide ranging distribution agreements with many retailers, and has known name brands that consumers are familiar with. While this is speculation, I would anticipate that new products will be available after September of 2009, with perhaps a couple of new devices in time for Father's day.
Position - Long Sirius XM, No Position Audiovox