Retail sales for satellite radio in July were still down on a year over year basis, but overall sales were better than most analysts were expecting. While Sirius and XM have now merged, the breakdown from NPD Group still outlines retail sales by brand. For July Sirius has virtually closed the retail gap, being down only 1% on a year over year basis. XM's July was not very good, with the XM brand coming in at down 52% when compared to sales in 2007. Combined, the numbers fare much better with the sector being down 14%. Many analysts have been expecting a 30% drop in the retail channel. Stifel analyst Kit Spring is expecting a 25% drop in retail for Q3 2008, and carries a $3 price target on SIRI. The retail split was 70% for Sirius and 30% for XM.

While many feel that retail is not a major factor in SDARS, that sentiment will soon change. With A-La-Carte radios set to debut soon, the retail channel could pick back up, although the early adopters will likely be existing subscribers upgrading their receivers.

As the year continues to progress, and new receiver become available, the retail channel will be interesting to watch.

Position - Long SIRI