I receive a lot of e-mail regarding the potential of satellite radio in the used car market. While I agree that there is a market there, I have trouble in trying to utilize that factor as a reason to look at SDARS in any manner differently.

The used car channel has the advantage of giving satellite radio potential additional subscribers on vehicles that already have the radio installation subsidized and paid for. This makes that potential subscriber more profitable to the company, but how is that success measured? It is the lack of the ability to measure this metric that always makes me discount it from an investment perspective.

Instead, I try to focus on the metrics that can be measured, and have more predictable results. I look at this used car market as an added bonus should it develop into something more measurable that adds to the bottom line.

While I do feel that SIRIUS XM Radio should try to market to these potential subscribers, I also recognize that there is no guarantee at this point of how successful the marketing campaign would be. How much money should be spent in an effort to get an unknown amount of subscribers?

In order to get to their stated goals, and in order to impress investors, SIRIUS XM Radio needs to offer demonstrable results, and something that everyone can sink their teeth into. I view the used car market as having great potential, but am not hanging my hat on it. Results in this sector are in my opinion an added bonus.

What I feel will happen is that Mel Karmazin will get into a heavier marketing to this segment a few quarters down the road. The company is already addressing the certified pre-owned market, and that can deliver measurable results via reporting from the OEM's. Extending beyond that too quickly, and investing heavy dollars into a program that is at best an experiment is not a move that I see Karmazin doing right off the bat. Given time, this market can develop further. Many potential subscribers may well activate via exposure to existing advertising.

The bottom line is that the used car market will develop with time organically. Know that it is there, and understand the potential, but in my opinion, don't use it as a foundation for placing your bets.

Position - Long SIRI