The retail sales data as presented by NPD covers satellite radio sales at many, but not all retail outlets. Direct sales of Sirius and XM are also not included in the data. Throughout 2007, comparisons on NPD data to 2006 have been less than stellar. With OEM's installing more and more radios, difficult comparisons early on from Howard Stern related sales, and consumer confusion about satellite radio because of the merger, there has not been much positive when looking at the retail data.
At the request of a reader I looked at the "ramp-up" from October 2006 to November 2006 and compared it to the "ramp-up" from this past October and November. The results are interesting as well as encouraging.
OCTOBER 2006 TO NOVEMBER 2006 RAMP UP
- SIRIUS - Up 102%
- XM - Up 69%
OCTOBER 2007 TO NOVEMBER 2007 RAMP UP
- SIRIUS - Up 145%
- XM - Up 70%
Both Sirius and XM exhibited better month over month comparisons this year as compared to last. While admittedly this is a very short time frame from which to garner any data, and it is too early to make a determination, the trend would may indicate that satellite radio may have a better retail quarter than many analysts are expecting. It should also be noted that while the "ramp-up" is impressive, the October 2007 retail sales were relatively bad as compared to 2006.
As we are all aware, the important month in retail sales is December. The companies have a large hurdle to match last years sales, and investors should not necessarily expect that Sirius and XM can accomplish this. For Sirius, December would have to see a "ramp-up" of 409% over this past months sales, and XM would need a 445% increase over the November number to match last years December sales. It will be interesting to see what the retail data for December brings.
Position - Long Sirius, XM