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Thread: The Ipod advantage will be short lived.

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  1. #1
    crfceo is offline
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    The Ipod advantage will be short lived.

    As I sit in thought, it dawned on me that Goldmans analyst listed among other things, the ipod theory. I've been listening to this argument for the better part of a year or more.

    As it turns out, did you know that using an Ipod while driving is illegal is illegal in many states, and even more laws are on the agendas of even more? They are grouped into cell phone laws, hence the term distracted driving.


    http://www.iihs.org/laws/cellphonelaws.aspx

    "Wienkes said that young customers are buying fewer satellite radios and are instead turning to other technologies like the latest iPhone."

    Goldman's ace analyst appears to ignore this little gem. I expect that distracted driving laws are going to get tougher in all states. This is a positive for satellite radio. Here is another example:

    Come July 1, both hands best be on the steering wheel.

    No longer will it be legal to drive a vehicle with one hand while using the other to hold a cell phone for a conversation.
    If drivers want to chat on their cell phones, they need to have both of their hands free. Many hands-free devices are now available.

    Law enforcement officials say they will take a zero-tolerance approach when the new law takes effect: No warnings. Violators will be issued a citation that carries an $88 fine for first-time offenders. Do it again, and violators will be facing a $190 fine.
    “There will be no grace period and no warnings,” California Highway Patrol Officer Jaret Paulson said. “We have been educating the public about this new law for many months. There have been articles in the newspapers. Cell phone companies have also been aggressively advertising the new law and what cell phone equipment is available. If we stop a motorist using a hand-held cell phone, he or she will get a citation.”


    http://www.napavalleyregister.com/ar...7702327568.txt

  2. #2
    john is offline
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    You see crfceo, here is another piece of good information, you have put out and I just saw another before. I to have never agreed with, Ipods where competetion for satellite radio, even during the merger arguement, on it being a monopoly, (that for me, was always is it radio or is it satellite radio). Lets face it content is king, and will always be. I have said it many times that I pods are nothing more then clorified walkmans or CD players. Did they kill radio, no. They maybe used as an accent to both types of radio, but will never replace ether. If people believe that Ipods will replace or be that big of competetion for satellite radio. Then it should follow they have to believe that satellite radio will do the same to terrestrial radio. Lets face it which is the bigger competetion to the other, that answer is simple. Because if you think Ipods would put SIRI out of bussiness then you have to believe that Ipods would do the same to terrestrial radio, that is not going to happen.

  3. #3
    zcurzan is offline
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    I think we can all agree that a portable music player can never replace the usefulness of a radio product. Therefore, what are you feelings on why satellite radio has been so slow to adapt? It is the price points? Or is it destined to be a niche product?

    Pending the merger I really think that a lot of people would opt for the service if it was cut to only 7 bucks a month, especially seeing as the hardware is already existing in their cars. Enough so that it would have a positive net revenue value taking into account current subscribers down grading. And as these OEM units in cars hit the used market, that only adds to their presence.

    Too little too late?

  4. #4
    crfceo is offline
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    I don't think it has been slow to adapt. It was being adopted at an incredible, I believe unprecedented rate when the merger and the FCC stalled the growth...

    I was just looking at the Lamborghini article and realized that I missed something. I've seen so many model announcements over the years and thought that the numbers for "Lam" made little difference.

    But I was surprised to learn they are including a free lifetime subscription. Now I know it's high end and offers little in the way of sub growth, but with the big automakers looking to get vehicles off the lots, it has potential to become a standard in many if not all cars.

  5. #5
    zcurzan is offline
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    So you think in the future the big automakers might go so far as to purchase lifetime subscriptions for the OEM units in the car?

    I'm not familiar... How does this compare to what they are doing now? Are they bankrolling a years-worth sub? What's the lifetime rate 400, 500 bucks?

  6. #6
    crfceo is offline
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    Most are anywhere from 3 months to a year, depending om the model. But they are not bankrolling anything. The cost for the trial is paid by the manufacturer.

    One thing I meant to mention earlier when we were talking about adoption rates, was chip availability. The only thing that stunted satrad growth for many years was the inability to produce enough chips and subsequent radios. The limted availability made the chips rather expensive, which is where the chip subsidy came into play. Sirius and xm had an unproven technology, and they paid part of the chip costs.

    We have a proven technology now. GM, Ford and Chrysler have very large stakes in the success of satellite radio. It would stand to reason that they would now be willing to take on the lifetime sub.

    Keep in mind, a lifetime sub is good for the life of a radio, not a person. People tend to buy a new car every 3-5 years, so the lifetime option means their (oem's) customers will never be without satellite radio for the life of the loan or lease.

    Side Note: Mel K.! If you are reading this, just give me the job, and I'll get it done!
    Last edited by crfceo; 06-24-2008 at 07:33 AM.

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