In their conference call XM indicated that NPD data has become less relevant and that the NPD Group only picked up about 40% of XM's sales at this point.
In terms of predicting the overall sales, the NPD number is becoming a smaller share of the pie, but the relevance is still of value. NPD's numbers are based on actual sales of devices at participating retailers.
XM's statement that NPD is picking up about 40% is understating the actual results slightly on a full year basis, and way off the mark for the Q4 of 2007.
HERE ARE THE PERCENTAGES NPD PICKED UP IN 2007
Q1 2007 - NPD picked up 39% of the Gross retail number
Q2 2007 - NPD picked up 46% of the Gross retail number
Q3 2007 - NPD picked up 38% of the Gross retail number
Q4 2007 - NPD picked up 62% of the Gross retail number
FY 2007 - NPD picked up 47% of the Gross retail number
HERE ARE THE PERCENTAGES NPD PICKED UP IN 2006
Q1 2006 - XM did not report Gross retail subscriber data
Q2 2006 - NPD picked up 49% of the Gross retail number
Q3 2006 - NPD picked up 46% of the Gross retail number
Q4 2006 - NPD picked up 67% of the Gross retail number
FY 2006 - NPD picked up 50% of the Gross retail number
The difference between 2006 and 2007 on a full year basis is 3 percentage points (47% vs. 50%).
There are quarters where NPD is picking up only 40% of the gross retail number. NPD is picking up less this year than last. Sales directly by XM, as well as direct sale campaigns have increased. NPD is relevant in that it gives an indication of the behavior of a consumer who walks into Best Buy.
Another factor is that neither Sirius nor XM have come out with a new "gotta-have-it" retail product lately. When a product gets hot, consumers are more apt to buy at typical retailers.
Is there a shift? Yes. Should investors assume that NPD only picked up 40% of Q4? No, the data states otherwise. Should investors use 40% for Q1 of 2008? Perhaps. Realistically, I would assume 45% in Q1, Q2, and Q3 and over 60% in Q4.