Let’s start with the obvious. If the app were to include Howard Stern, there would be an instant rush to download it once again. Like him or not, Stern is a draw for subscribers. Whether Stern will be on the app any time soon is yet to be seen, but one would think that some resolution will arrive soon.

The not so obvious has nothing to do with content. How do you increase the value of the iTunes app for consumers? One interesting answer could come out as early as this Fall with some new hardware. Rather than the launch of several new radios, the big news could well be the launch of some accessories that help to integrate the iPhone and iPod Touch with satellite radio.

No, I am not referring to an Apple device that includes a satellite radio chip. What I am referring to is a car dock, home dock, and perhaps even a “boombox” that could house a satellite radio chip. In effect, the iPhone and iPod Touch are receiving their feed through the Sirius XM Internet Radio side of the business. While this is good, not all channels are available on the Internet feed. What if a dock could serve as a method for iPod’s and iPhones to access the satellite feed?

The iPod Touch uses WiFi which allows a consumer in a WiFi hot spot to listen to Sirius XM. Take your iPod Touch to your car, and you no longer have access to the service. However, what if you have a car dock that allows you to now gain access to the satellite feed, while charging your device?

Logistically speaking, there is nothing to stop such capabilities from happening and having them happen in a short time-frame. The company has two components to consider. The software, and the hardware in order to make this speculation a reality.

From a software perspective, all that is required is updating the app to carry the ability to work on both an Internet feed as well as a software feed. In theory, the app could be instructed to seek a satellite feed when docked. This would give the consumer a larger cross section of Sirius XM content that is not available on the Internet feed. When undocked, the device would work on the Internet feed.

From the hardware side, all that is required is a dock that can house the satellite radio chips, and of course a satellite radio antenna that will send the information to through those chipsets. A few years ago, XM satellite radio developed a line of products based on the Passport. The XM Passport was a small chip that was inserted into devices that were “XM Ready” The subscription was tied to the chip. An XM subscriber could have an “XM Ready” audio receiver on his home entertainment system, a second receiver on his boat that was “XM Ready”, and the one subscription would tie to his Passport chip. This allowed the consumer to take his subscription with him.

If Sirius XM were to develop a line of accessories that utilized such a chip, an iPhone user could literally have access to the satellite feed wherever he goes. A car dock with a chip slot, a home dock with a chip slot, and a boombox similarly equipped could all be potential satellite radio havens for a single chip. The potential in the OEM channel would be further off, but there is no reason it couldn’t happen.

From the company perspective, they would get subscribers to upgrade to a level of service that includes the Internet as well as the satellite feeds. This would boost revenue, and the company gets to decrease hardware costs substantially because the development of the user interface is done by Apple. Building a simple dock is far less expensive than developing a satellite radio. From a consumer perspective, a satellite radio subscription has more value now because one subscription can be taken from place to place.

I would expect that by the end of Summer Sirius XM will be announcing their new hardware. rather than several new radios being the featured products, I anticipate accessories to be the hot topic of discussion. I would anticipate an apple compatible line consisting of car docks, home docks, boomboxes, tabletop radios, and perhaps even a set of headphones to be part of the overall package.

To be clear, I do not see satellite radio abandoning retail radio manufacture and distribution. There is still a need for non-Apple satellite radios, and the company would be foolish to not meet that need. What I do anticipate is a more trimmed down and modest line of satellite radio offerings coupled with some neat Apple docks. If the company does this, it will be interesting to see the download rate of the Sirius XM app on iTunes.

Position: Long Sirius XM – No Position Apple

Early success of the Sirius XM app vaulted it to the number one music download on iTunes. Within a couple of weeks, the app surpassed 1 million downloads. Now, a week later and much to the chagrin of investors, the Sirius XM app has fallen below Pandora. At this point Pandora enjoys the #12 position and Sirius XM sits at #15.

What this proves is that the competition on Internet radio will be strong. It also proves that Sirius XM, even with strong brand recognition, needs to do as much as they can to remain on top. To do that they need to find a way to compete with the high points that attract people to services such as Pandora. Pandora sports customized channels, something that Sirius XM should consider. Pandora is virtually free because of advertised support. This is something that Sirius XM can not compete with. Thus, Sirius XM needs to focus on exclusive content as they work towards improving the Internet service to offer more capabilities that are appealing in services like Pandora.

Launching the app without Howard Stern was a mistake, as he and his channels are a big driver for satellite radio. Until the Stern mess is cleared up, Sirius XM needs to point out that the other exclusive content available on their Internet service is worth the price of the subscription. This can only be accomplished through good marketing, and exposing people to the content. One week of free service is not enough time for consumers to evaluate the value of becoming a subscriber.

In my opinion, Sirius XM needs to increase the free trial to a point where they can at least capitalize on the word of mouth impact that apps tend to have. If a consumer downloads the app, and does not get a chance to experiment with the service and expose themselves to the value of a subscription, then that is opportunity lost. The “gotta-have-it” factor is diminished by the fact that many simply can’t even offer an informed opinion about Sirius XM.

Sirius XM also needs to get good channel descriptions on the app as soon as possible. Consumers don’t know what the Loft is, nor Faction. Some channels are self explanatory, but others simply leave someone guessing. Sirius XM needs to feature their D.J.’s, and talent. Consumers need to be able to navigate the app as easily as possible. The app needs to provide a wow factor that encourages exploration and participation.

The fact that you can get Sirius XM on an iPhone is great. The company needs to continue to improve the app and the consumer experience in order to maintain a competitive advantage. Presence on the top of the iPhone charts is critical to the perception of consumers, and consumer perception is critical to the success of Sirius XM’s app. It is a vicious circle, but if Sirius XM wants to stay in the game, they have to dance the dance.

Position – Long Sirius XM

The success of the long awaited app is good news for consumers, and a mixed bag for investors. Simply stated, there is no detail available as to who exactly is downloading the app, and what the mix of existing vs. new listeners is. We simply do not have the kind of detail needed to asses the value of 1 million downloads, and with various scenarios at play, the milestone could mean anything from good news financially, to a break even proposition.

- Existing subscribers that download the app add nothing to the subscriber rolls, but may add to the bottom line. If they were not previously paying for the $3 Internet feed, the company gets a bit more revenue out of that subscriber. If they were already an Internet subscriber, then the financial benefit to the company is nothing.

- New listeners that download the app are not counted as subs, and as yet, the company has not supplied a conversion rate. If a new listener subscribes, the company is looking at a minimum of $12.95 per month and a new subscriber. If the promotional subscriber does not subscribe, it does not impact churn. A successful Internet conversion rate is typically no more than 5%. As you can see, even with 1 million downloads, it will be a challenge to garner new subscribers.

One hurdle faced by Sirius XM Radio is the short length of the promotional trial. Listeners only get one week to test drive the service, and functionally, that is not a lot of time. With services such as Pandora and Slacker offering free music, it is not hard to imagine someone trying Sirius XM for a week, but reverting back to the free service apps offered on iTunes. Sirius XM has distinct advantages and disadvantages when compared to the free services out there. In my opinion, a week does not give the consumer enough time to really learn the advantages offered by Sirius XM.

The pace of downloads is impressive, but 1 million downloads with no data to break down is virtually worthless to investors. The company needs to provide some clarity in those numbers, improve the app, and branch out with apps for Blackberry, the Palm Pre, etc. Time will tell.

Position – Long Sirius XM, No Position Apple

So how can Sirius XM make the app more of a success? In my opinion, they should make it more interactive. This weekend I found myself listening to Boneyard (Sirius 19 and XM 53). Boneyard is doing a countdown of Rush songs. The countdown was formulated by fan emails regarding the popularity Rush songs. I learned of this by cross promotion on Classic Rewind, and found myself tuning into Boneyard to catch songs from what is one of my favorite bands. This got me thinking.

I have always felt that Sirius XM has not done enough to utilize their web presence. With the iPhone app, the company has an opportunity to make the service more interactive for consumers. Why not upgrade the existing app to include some features that allow subscribers to feel more a part of the service?

Song request Function – A simple function that allows users to submit a song request. The subscriber can enter the channel and song. The company could then promote the $3 per month web tier by having a bumper such as ” As requested through the iPhone app”

Contest Function – A simple function that allows users to find all Sirius XM contests in one easy to use place. This function should be part of the app, as well as part of the web service.

“For Profit” Survey Function – A volunteer based function that connects subscribers with the companies that want to advertise to them. The company collects a fee from advertisers, produces a survey, and then gives subscribers points that can be used towards new hardware, or subscription costs. This gives value to advertisers as well as subscribers. Because it is volunteer based, those that do not want to participate do not have to.

Channel Specific Links – Provide links to specific channels. This would allow users to get a description of the channels, and submit comments, and even link to Twitter, Facebook and YouTube pages dedicated to that channel.

Search Function – This is a function that would allow users to enter an artist name, song name, or talk show host. The app would then tell the user where on Sirius XM that the artist, song or person can be found. An Eagles fan could enter “Eagles”, and be directed to the channels that play the most eagles songs.

New functions such would make Sirius XM far more interactive for fans, a key component to the popularity of services such as Pandora and Slacker which allow user customized stations. The more value consumers see in an app, the more frequently they will use it. Hopefully Sirius XM is considering such upgrades for not only the app, but for their general website as well.

Position: Long Sirius XM, No Position Apple.

With all of the excitement, news, and reviews, there is still one question on the minds of many. Why isn’t Howard Stern available. Speculation ran wild, and calls to Sirius XM were met with an overall silence with regard to the issue. Some felt that Sirius XM was holding back, others felt that there was a potential worry about bandwidth on AT&T’s network, and still others thought the issue may revolve around Stern wanting more money.

While any official confirmation has not been made, there are several indicators that would point to the fact that Stern is a central part in this issue.

1. The general lack of discussion of any kind regarding the app coming from the Howard Stern Show.

2. Indicators on Gary Dell’Abate’s Twitter page that indicate possible rights issues. Note, the page appears to be Dell’abate’s, but verification could not be made prior to publishing. Note: It has since be verified to be fake.

3. Sirius XM taking on a virtual silence, which would indicate that the issue is in some form of negotiation.

It would appear that the Stern contract, which likely has many stipulations, must have some clause dealing with “mobile media”, and the potential of third party operations. In short, there are various aspects of the app that may trigger a “no-go” for Stern inclusion unless the parties sit down at the table and negotiate. Such possibilities include, conflicts with In-Demand, mobile media exclusions and inclusions, or perhaps even something specific to Apple.

Now, before everyone starts talking about all of the money Stern already has, and labeling him as money hungry (which he actually is), we need to step back and understand the dynamics at play. If Stern, or his agent, was smart enough to see the potential moving forward, than I take my hat off to them. However, in this case, it is quite possible that Stern is biting the hand that feeds him, and his actions have squandered the possible exposure associated with the launch of the iPhone app.

To be fair to Stern, there is no way to know exactly where things stand. His possible demands could be very simple and doable, and if that is the case, shame on Sirius XM. Karmazin is known as a cost cutter, and perhaps the parties simply came to an impasse as time ran out for the launch of the app. The launch date would have been the leverage Stern had, and with that now gone, perhaps more realistic negotiations can happen moving forward.

Sirius XM can never recoup the lost exposure they would have had if Stern was part of the app. Let’s hope that the financial decision made was worth it, and the parties can hammer out the details moving forward.

Thanks Mike!
Position: Long Sirius XM, No Position Apple.

The iPod touch is identical to the iPhone, with the exception of the telephone aspect. As a Blackberry fan and user, I could easily see myself swayed to the iPhone side of the aisle after using the iPod Touch for only a couple of hours. Coming from a guy who is into gadgets, and has his Blackberry tethered to his hip, that is high praise.

Typically for satellite radio, June has always meant that a new and trendy satellite radio would be unleashed on the retail channel. This year that trendy new satellite radio is not a piece of hardware, but rather a software application that links up to what can only be described as the most innovative hardware out there.

The beauty of this move is that with Sirius XM boosting their Internet line-up, to include sports news, and specialized music, there is instant value in existing subscribers upgrading their service to include the Internet feed. On top of that, the additional programming allows Sirius XM to offer content that simply is not available with services such as Slacker or Pandora. This will attract new customers to the fold. One key element that is still unclear is whether the Sirius XM application will cache content in a similar fashion to Slacker. If Sirius XM does this, the value of getting a subscription increases dramatically.

The beauty in devices such as the iPod Touch and iPhone over a traditional satellite radio receiver is that they are multi-functioning devices. There isn’t a satellite radio out there that also allows you to track expenses, play a few mindless games, make calls, and also surf the net. The Apple products put almost any electronic desire in the palm of your hand in a single device. The need to carry around two or three devices has simply evaporated.

It is an application such as this that also adds value to an OEM subscription. Many OEM subscribers are forced into a position of leaving all of satellite radio’s content cooped up in their car. If they want satellite radio in their house, they are forced to buy a retail radio and additional subscription, or buy the Internet feed and stream it through their PC. The iPod and iPhone take the next logical step. It is one device that allows consumers the most bang for their subscription dollar. Now they can have SDARS is their cars, tunes in the gym, and even hook up their iPod to virtually any stereo in existence! Why pay subsidies to install radio in the used car market when the consumer already has a device capable of streaming Sirius XM on their hip?

As for the Sirius XM app, there are positives and negatives which will be covered in this review. Downloading the app is free, and comes with a seven day free trial. I love the idea that the download is free, but firmly believe that the trial period is too short. In my opinion, people need a decent chance to try out and explore the service Seven days simply does not provide enough time for someone to fall in love with the service, and understand the value behind it.

The most obvious negative came with the news that Howard Stern and his channels would not be included in the app. The ire was instant, and hundreds of Stern fans flocked to various sites, and even iTunes to lodge their complaints. While I believe the absence of Stern is a huge mistake, there is still 120 great channels of satellite radio to listen to. A reason for Sterns absence has not been disclosed, but consumers and investors alike are in hopes that Stern will soon appear on the service.

The functionality of the app is very straight forward and user friendly. Featured at the bottom of the screen are the mainstay navigation buttons. Categories, Channels, Favorites, Shopping, and Settings.

Categories Button

This button brings you to a categorical listing of what Sirius XM offers on the service. Channels are divided into 18 categories, and by doing this users can easily locate the type of content they want to hear. One improvement I would like to see is a slight shade differential between the categories. This simple change would make the page appear to have more depth, as well as let a driver more easily differentiate the various categories.

Channels

This function allows the user to scroll through all of the available channels with the flick of a finger. Channels are categorized for ease of navigation, and feature the channel logos that we have all become familiar with. Absent from the screen are any channel numbers, which means direct tuning input is not an option. One improvement the company should consider is a channel preview function whereby you can see what is playing on another channel prior to selecting it. Additionally, I would like to see a jump button on the application, which would allow for quick access to the previously listened to channel.

Favorites

The Favorites button allows you to save your favorite channels in one convenient place. The instructions tell the user to “click on the song above to save the channel as a favorite”. The instructions seem simple, but when listening to Fox News, there is no song. The instructions should say, “click on the title bar above to save channel as a favorite”. Am I Nit-picking? Yes, but little things like this cheapen the brand and experience. Overall, the favorites section is well thought out, and makes the user experience more user friendly.

Shopping

Most buttons are self explanatory, but the shopping button offers something that will be new to Sirius XM subscribers. If you hear a song you like, you can buy that song directly through your iTunes account. A simple concept that allows iTunes users to combine music discovery with their overall experience. This function is a financial winner for Apple, and Sirius XM will likely get a referral fee for their efforts.

Settings

The settings button is pretty simple to understand, and outlines how to use the app. The descriptions are straight forward, and the few minutes it takes to read these tips will give users a better overall experience.

Another cool feature on the app is the on-screen volume control which users can hide if they so desire. For parents, channel blocking is available, and you can even hide these blocked channels from the display. One missing component is the ability to lock the screen so that accidental channel changes, etc. can be avoided.

What I would like to see

Aside from the items mentioned above, there are a few things I would like to see added to this app for future releases:

1. A function that allows you to continue listening to Sirius XM while you use another app.
2. Album art, artist information, and lyrics. Other competing service offer this feature, and it is pretty cool. Such features would take this app to the next level.
3. A schedule section that gives users a guide of various shows and hosts.
4. A car/house dock that not only charges the iPod, but allows access to the standard satellite channels via an optional satellite radio antenna when docked.
5. User customized channels like other services have.
6. A mute button for instant silence if needed.

Overall, the Sirius XM app is slick, and provides a new outlet for the company to garner subscribers, and for consumers to access the service. It adds value to existing subscriptions by giving users the ability to take their music with them. If the iPhone app includes you favorite channels, it will solve satellite reception issues with relative ease. If you are in cell range or WiFi range, you are good to go.

Position: Long Sirius XM, No Position Apple.

People are wondering why the absence of Stern. Some seem to think that there is a contractual issue, some think that the company may not have the rights to include Stern, some think Stern wanted more money, and others believe that the company is doing what it can to get additional dollars out of consumers.

In my opinion, there is nothing that should have held back the inclusion of Howard Stern. Stern’s show is already available on the Internet feed, and in point of fact, the iPohone and certainly the iPod Touch are basically mini computers. As a consumer, I can buy an AT&T air card, plug it into my computer and stream my Sirius XM Internet subscription that includes Howard Stern. Why shouldn’t I be able to do that on an iPhone or iPod Touch?

Sirius XM Radio has squandered a wonderful opportunity by excluding the very content that people are clamoring for. The iPhone and iPod Touch phenomenon is something that Sirius XM needed to embrace, and they needed to do it in a big way. Instead of a wonderful app that gave consumers value in their subscription, Sirius XM’s new offering seems to fall short of being a “must have” app. Instead of people talking about all of the great things available on the app, people are focusing on what is not available. That creates a hurdle that makes garnering new subscriptions far more difficult than otherwise would have been the case.

The damage is now done, and it will be hard to recover from. There are already over 200 people who have rated the app with only one star. Overall the app is rated as a two star app. By contrast, Slacker, and Pandora enjoy near perfect consumer ratings on iTunes. People want to know why Howard is not available, and thus far there are no real answers being provided. Consumers may feel slighted because of the missing content, and investors are sure to be angry over this fiasco that they hoped would provide stability to the stock. In the end, as things look at the moment, no one wins.

Long term, the app may provide a boost to the company revenues, and even subscriber numbers, but these results will pale in comparison to what it could have been. It is sad to see such an opportunity squandered. It is sad to see the company make another move that gives the naysayers a stronger voice. Hopefully the company will provide more insight on this, and they will modify the service to include as much of their content as possible. What happens next is anyone guess.

Position – Long Sirius XM, No Position apple, No Position AT&T

At first glance there is a lot we can learn from the new SiriusXM.com iPhone information page, most importantly that they are offering a free 7 day trial for all new listeners and that the application itself is FREE, something we all knew would be important from the get go. That being said, there are quite a few things that I don’t think a lot of people we necessarily expecting.

The first thing that should jump out at readers is that the new iPhone application is only available in the United States. One would have to assume that this is because of royalty fees and regulations at this point, similar to those that have plagued the international availability of other Internet Radio companies but, it will no doubt be disappointing to those people outside of the country who have been so eagerly awaiting the release.

The most shocking thing about the new iPhone may not be the 120 available channels but instead, the channels which are NOT available. The list astonishingly includes MLB® Play-by-Play, NFL Play-by-Play, SIRIUS NASCAR® Radio, and Howard Stern! How could the person who Sirius XM cites as being responsible for bringing in more subscriptions then anyone else not be part of this application? As we sit and wait for more news this is certainly something that will have both investors and subscribers alike scratching their heads disbelief.

Update: The reviews are already flowing into the iPhone app page dedicated to Sirius XM on iTunes and it has not gone without notice that Howard Stern is not available. People are, shall we say, less then pleased. A quick search of twitter for the terms “Sirius Howard iPhone” should give you an idea of the tone being used in the emails which are already flooding into my inbox.

For more information readers can visit siriusxm.com which has apparently, for the time being, been transformed into a stand alone promotional website for the iPhone application

Finally, Sirius XM is going to be launching an iPhone application. There is a lot of speculation about what this will mean for consumers as well as investors. With a weak OEM channel, and a sluggish economy, there is potentially a lot riding on this soon to be launched application.

Properly marketed, this application can help the bottom line in many ways. However, in this economy, even the best marketing plans are challenged when it comes to separating a consumer from their dollars. Thus, what can Sirius XM do to ensure massive exposure with this application? How can they make sure that as many people as possible get exposed to the service? Perhaps the best way is the simplest…

Give It Away For Free

I know the consumers are happy with that, but the investors may well be scratching their heads. Let’s consider the OEM model of attracting subscribers. When a consumer buys a car, they get 3 months of satellite radio free. Why not offer a free three month trial for the iPhone application?

Yes, it will push off potential revenue for a few months, and will have costs because of royalties, but free will bring many more people into the door than trying to sell a subscription, and at this point getting the most exposure is probably the most important factor. In addition, the “free” strategy does not have to go on in perpetuity. If it does not deliver results, the company can go back to the standard model.

As we are already aware, services such as Pandora, Slacker, and IheartRadio are among the most popular application downloads. Just the simple fact that these downloads are popular gives these companies added exposure on the web, and generates more downloads. With my Blackberry, I always refer to the “popular” applications, and oft download them. Users of the iPhone are no different. By offering three free months, Sirius XM will get their share of that “popular” page.

Services such as Slacker and Pandora are competing for the same listeners and fans. If Sirius XM is able to demonstrate that they offer something that those services can’t, in the form of live content, news, sports, and talk, they will be able to demonstrate to the consumer why there is value in getting a subscription.

Part of the business model for Internet radio services is the “up-sale”. They get you using the free portion of the service and liking it. You then get “up-sold” to getting a subscription for even more benefits. The key to accomplishing an “up-sale” is having a customer in the first place. This is why a three month free promotion may be the best way for Sirius XM to market their service. They can get the customers in the door via the free promotion, and then up-sell them to a full subscription. Even if the take rate is 30% (as compared to an OEM take rate of 45%), it will be a substantial boost to the company going forward, because aside from more expensive royalties, the costs associated with the application are much more cash flow friendly.

Whether Sirius XM has this in mind for their launch of the iPhone application is unknown. What is known is that they need to make a splash with this from BOTH a consumer as well as investors perspective. Look for the iPhone application to be launched in Early June.

Position: Long Sirius XM Radio, No Position Apple.

Today is a different day. We now have Sirius and XM merged, and the iPod has graduated to the iPhone. No longer will iPods need to have satellite radio chipsets installed at a cost to Sirius XM. Instead, the service can be delivered over the Internet and directly to iPhone and iPod touches.

In their quarterly call Scott Greenstein hinted that the application would feature the ability to stream more than just the Internet feed, but also stream additional channels for talk, sports, and news. Greenstein’s comment likely was overshadowed by the fact that the company actually announced that the long awaited application would actually be delivered in Q2.

Many may not be aware that the Internet feed of satellite radio excludes many channels that are available in the standard satellite feed. News channels such as Fox, CNBC, etc. are not in the Internet package. Nor is there any live sporting coverage (Notre Dame Football is featured) or traffic and weather.

It would appear that what Greenstein insinuated was that the iPhone application would deliver a more robust line-up. This is potentially big news. Imagine if you could catch your favorite teams broadcast on your iPhone. Wouldn’t it be great if channels such as Fox news were included in the service? While the company was not specific about the content offerings that would be included, they did say that the offering would be “enhanced”. Perhaps the timing of the iPhone application and the rumored Baseball news becoming available to Sirius Subscribers has some merit.

In preparation for this launch, Sirius made some great business decisions, and dropping the Internet feed for a standard subscription, while raising the Internet feed sound quality was the first. Now, if you want to listen to Sirius XM over the Internet, you need to pay an additional $3 per month. Yes, consumers may feel a bit scorned, but from a business standpoint, the move makes perfect sense. If the iPhone application delivers a level of content that rivals the satellite delivered service, subscribers that already have iPhones will jump at the ability to combine their satellite radio service into their cell phone. This will deliver an additional $3 per month in revenue, and increase metrics such as ARPU (Average Revenue Per User).

The next positive aspect of the iPhone application is that there is no satellite radio chipset to subsidize, nor does the company spend money on manufacturing and distributing radios. This will trim costs substantially, and have a positive impact on the SAC (Subscriber Acquisition Cost) metric. The iPhone application does not require the company to pay for space on retail shelves, and does not require a sales force. If your iPhone breaks, you will call AT&T, and not Sirius XM customer service. All around, an application for the iPhone and iPod touch saves the company huge amounts of money.

What does the company do with that saved money? Well, they can take some of it and market their new iPhone app, but the real brilliance here is that Apple markets itself. Sirius XM does not need to sell iPhones. They simply need to make the millions of iPhone owners aware that an awesome new application is ready and waiting to be downloaded. A simple yet cost effective ad campaign can perhaps deliver more bang for the buck than anything previously seen (with the exception of the one year Stern promoted Sirius while still on terrestrial radio).

The iPhone app will also appeal to non-subscribers at the existing subscriber price of $12.95 per month (plus perhaps a small premium above that). If you have an iPhone or an iPod touch, do you really want to be tethered to yet another device? Now you wont have to be. You now have an all-in-one solution. Properly marketed, Sirius XM could garner a whole new set of subscribers to the pool.

The iPhone also has positives in terms of the consumer. The consumer does not have to buy a radio. The entry cost to get involved in satellite radio is no longer a hurdle because there is no radio to purchase. Consumers also do not have to worry about getting a radio installed or running an antenna. Becoming a satellite radio subscriber is now as simple as downloading an application!

With millions of iPhones and iPod touches out there, the potential is substantial, but before people run off with visions of 5 million new subscribers in their head, let’s apply some realistic parameters. The iPod phenomenon is biggest in the city. Walk around New York, and you see personal music players, iPhones, etc. everywhere. New York is a city where people don’t drive, the take the train or a taxi. The appeal in a city such as New York will be huge. In the suburbs, people tend to drive more, and thus, get a chance to listen to music, satellite radio subscription, etc. on their commute. These people, in my humble opinion, are less likely to make the jump.

The bottom line is that an Sirius XM iPhone app will be a revenue generator as well as a cost saver. that is a powerful combination that can not be ignored. Look for the iPhone app to be launched in early June.