radio rivalry pt 2
Wow! It seems like Sirius is on a very
aggresive expansion plan. First the signings with NFL, now satelite video? Apparently Sirius is planning to offer satelite video in the near future, whilst XM radio is contending that the technology is still to young for mass usage.
It'll be interesting to see how this move will seperate the two rather similar companies. Whilst satelite video sounds exciting, it's usefulness is still more limited than the radio.
SUPPLIERS: Satellite rivals split on video plans Sirius sees market, but XM is cautious
By Gail Kachadourian
Automotive News / January 19, 2004
The nation's two satellite radio providers have opposing views about the market potential of in-vehicle video service.
Sirius Satellite Radio Inc. of New York plans to offer satellite video within 18 months.
But its prime competitor, XM Satellite Radio Inc. of Washington, which says it has similar technology, doesn't believe satellite video will be commercially viable anytime soon. It will continue to concentrate on adding radio subscribers to reach profitability.
Whoever is right doesn't matter to Delphi Corp. The Troy, Mich., supplier has deals with both companies to develop the technology. It also supplies automakers with receivers to pick up XM and Sirius stations.
Sirius and Delphi this month showed off a vehicle at the Consumer Electronics Show in Las Vegas that could receive satellite video signals. The technology adds a decoder for under $100 to the existing satellite radio system. Delphi has sold 1.05 million satellite receivers for production vehicles since 2002.
The technology lets Sirius transmit video and audio programming over the company's existing satellite network.
Sirius has not sold the system to automakers, but says it is focusing on its audio customers: Ford Motor Co., DaimlerChrysler AG, BMW, Nissan, Infiniti, Volkswagen and Audi. Vehicles must come equipped with rear-seat entertainment systems.
Sirius won't be alone in its efforts.
"We're in partnership with Sirius, and we're trying to sell it to them (automakers), too," says Bob Dockemeyer, advanced technical manager for satellite digital audio radio at Delphi.
Delphi says development work is being done at Delphi's Kokomo, Ind., plant and Sirius' engineering site in New Jersey.
Sirius' Doug Wilsterman, senior vice president of OEM and dealer, says the company expects to launch the video system with three to four channels.
"We feel that an OE with some kind of normal product development timing and validation timing could have it available in 18 months to the consumer," Wilsterman says.
What this would add to a subscriber's bill is unclear. Sirius charges $12.95 a month for satellite radio. The company says it has not decided if it will charge extra for video service.
Thilo Koslowski, an automotive analyst for Gartner Inc. of Stamford, Conn., says Sirius' strategy makes sense. "They (Sirius) will certainly need this to compete with XM because XM has this huge lead," Koslowski says.
Sirius ended 2003 with 261,061 subscribers, up from about 30,000 at the end of 2002. XM finished 2003 with 1.36 million subscribers, up from 360,000 at the end of 2002.
XM also showed an in-vehicle video system at the Consumer Electronics Show. But it has no plans to offer the system to customers.
"We have to look at the investment, the market, the demand and the ability to deliver a high-quality product," XM spokesman David Butler says. "Those are all factors that today suggest it could be viable down the line, but it's not viable today."