The Sirius XM iPhone application has been released. Early success brought the app towards the top for the iTunes downloaded ranking, and since, the app has dipped to the #26 position. The initial wave of downloads has already happened, and now we should be able to gauge just how popular the app is going forward. That being said, what is next for the app?
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