5 Reasons to Anticipate a Sirius XM iPhone Application

Sirius XM Radio (SIRI) will soon release an application for the iPhone (AAPL). The company said on its Q4 2008 conference call that it will release an application for the iPhone before the end of the second quarter of 2009. This means that the Sirius XM iPhone application could be released anywhere between April and June of 2009 to the Apple App Store. The Sirius XM iPhone application is currently being beta tested according to the satellite radio company. The application will be a free download from the Apple iPhone app store.

You have to believe that a Sirius XM Radio iPhone application will be a huge success. Other companies such as Slacker, Last.fm, Pandora, and Clear Channel (CCO) already have successfully launched applications for the iPhone. Sirius XM Radio is a little late to the party, mostly due to having its hands tied in merger activities by the FCC for a year and a half, but you have to believe the Sirius XM Radio iPhone application could be a huge success.

Here are the top five reasons why we believe a Sirius XM iPhone application will be a huge success ranked from least important to most important reason.

Reason Number 5: Commercial Free Music

A Sirius XM Radio iPhone app would offer commercial free music in which an individual will not have to pre load music in an iPod like manner or create their own channel like other iPhone streaming applications like Pandora or Slacker. The individual would be able to randomly discover the music without commercials or pre thought.

Reason Number 4: Uncensored Music and Talk Radio

Other streaming applications on the IPhone may not necessarily play uncensored versions of songs or have the benefit of uncensored talk radio. Currently an IPhone Application called “Talk Radio” exists but the application only plays talk radio, no music. Pandora and Slacker have the opposite issue they play music but no talk radio. Sirius XM Radio’s iPhone application would offer uncensored music and talk radio in a single iPhone application.

Reason Number 3: Exclusive Content

Sirius XM Radio has certain exclusive content that you can not find anywhere else. An example of this is Opie and Anthony who recently were axed from CBS Radio, after CBS Radio (CBS) decided to migrate to a Top 40 radio format. Currently the only place that Opie and Anthony can be heard is on Sirius XM Radio. There are countless other examples of content that can only be heard on Sirius XM Radio like Mad Dog Radio, Oprah Radio, Foxxhole Radio, E Street Radio, and countless others. Each one of these exclusive content acts have their own individual following which would bode well for a Sirius XM Radio iPhone application.

Reason Number 2: Fans Have Been Waiting for an Apple and Sirius Connection for a Long Time

For years now fans of satellite radio has been hoping for an Apple and Sirius XM Radio connection. Through the iPhone's SDK this connection will now become a reality. A Sirius XM Radio iPhone application would be the first satellite radio product commercially available for an iPod. The Sirius XM Radio iPhone application would be available on both the iPhone and the iPod touch.

Reason Number 1: Howard Stern

It is said that Howard Stern had about 12 million listeners while on terrestrial radio. We can assume that some of those 12 million terrestrial radio listeners currently do not subscribe to satellite radio. A Sirius XM IPhone application will give another means for displaced Howard Stern fans to reconnect with Stern. Howard Stern already paid for himself with satellite radio listeners but he can effectively pay for himself again via the Sirius XM Radio iPhone application.

Because of the 5 reasons noted we believe the Sirius XM iPhone application will be a huge success. According to Sirius XM Radio’s President of Operations and Sales Jim Meyer, on the Sirius XM Radio Q4 2008 conference call, “When released, this application will permit an estimated 7 million US iPhone users, and additional iTouch users to access SIRIUS and XM internet content.” A time frame for the 7 million US iPhone users was not given by Meyer, but let’s assume that Meyer’s 7 million number one day becomes a reality. Sirius XM recently added a $2.99 additional monthly charge for its internet stream for existing subscribers. Let’s assume that all 7 million of those US iPhone application users are existing subscribers, this potentially would add an additional $250 million a year in revenue to Sirius XM Radio’s balance sheet. Ok, now let’s more realistically assume that 25 percent of those 7 million Sirius XM Radio IPhone app users become new subscribers to the satellite radio service. In this scenario approximately 460 million dollars in additional revenue would be brought in to the satellite radio company’s balance sheet via an iPhone application.

The pending Sirius XM Radio iPhone application potentially has the opportunity to bring in an additional $250 to 460 million or more in revenue for the satellite radio provider. Based on the reasons given not only will a Sirius XM Radio iPhone application be hugely popular for the satellite radio provider but it also has the potential to be a financially lucrative additional stream of income.

Disclosure: Author holds long positions in SIRI, AAPL

Comments

[JamesPS:]

The iPhone app is brings about a new chapter for Sirius/XM. As a content provider, Sirius XM would be in a position to provide new channels to iPhone listeners, without the bandwidth constraints of satellite. Also, they could bump up the quality of the streams fairly easily. Sirius XM could become an audiophiles dream if they could stream real CD quality music to the home.

I'd also love to see an XBox Streaming app (similar to the netflix app).

Mar 23 10:42 AM

[4play2:]

SatSad. There are over 200 million subs that will respond to your question to the affirmative. How about you, going back and tell that to the NAB.

Mar 23 10:53 AM

[hawkmandc:]

Reason # 6 Many existing sirius subscribers, like me, have been delaying adding second radios for their spouses, etc. simply out of procrastination. When my girlfriend gets her iphone 3g...which is any day now, it will be a no-brainer to add access to her phone via my account for a nominal upcharge....even a second full subscription isn't out of the question. While I'm also an investor in sirius, I can't be the only one out of 19 million subscribers thinking this way.

Mar 23 11:33 AM

[User 381364:]

what about the t-moble G1

Mar 23 12:15 PM

[User 381364:]

T-MOBLE IN L.A. HAS MUCH BETER COVRAGE

Mar 23 12:17 PM

[4play2:]

My mistake. One too many zeros. Okay around 20 million subs disagree with SatSad...

Mar 23 12:25 PM

[connorport:]

It is good to hear that SIRI is heading to the forefront of Internet Radio as well. This was always a concern to investors. This should sow them up nicely. So far none of the internet stations have made any money due to their lack of skills in interpreting royalty's. SIRI is already dishing out hefty for them.

Mar 23 01:14 PM

[connorport:]

I wouldn't advertise you steal from the record labels! The Feds love idiots who brag about it. Might get the whole family arrested! Now that would be entertainment worth paying for!


On Mar 23 09:04 AM satsad wrote:

> Too bad the quality of content has declined since the merger. The
> more independent type of channels such as Fred & Ethel along
> with others are gone. This was a great opportunity to listen to more
> indie bands, but as more of the channels are more like what I can
> get on everyday broadcast radio (with advertising on satellite and
> broadcast) I question whether I will order XM for my next car. Is
> it worth paying extra just to hear uncensored comedy with 20 minutes
> of commercials? Is it worth paying extra for the chance to hear the
> occasional profanity in a song? I don't think so. I have an I-phone
> along with everybody else in my family. I will not add a pay channel
> to it. We in my family have the App called Shazam. When we here a
> song we like, we tag it then download it. Commercial free for real.

Mar 23 01:18 PM

[appDev:]

This comment will be a huge success. It's ok that I have a limited vocabulary, as long as what I say is a huge success, or what I talk about is a huge success.

My thoughts are repetitive, but I think they are a huge success, and I'll tell you why:

Only a huge success like me can point out that you will still need to pay for your Sirius subscription to listen to it on your free iPhone app. So while the app will no doubt be a huge success, the reasons given are not well reasoned.

But hey, there are a huge success, no doubt!

Mar 23 01:42 PM

[JamesPS:]

I'm hoping other internet streaming deals are in the works. How about XBox, Tivo, etc.

They have the infrastructure to provide other channels via intenet without bandwidth problems. How could broadcase special short term content on special channels...For example: A Microsoft sponsored concert with sparse sponsorship info. I could go on for hours. Sirius XM has paid their dues. Basically they have fixed costs associated with launching satellites, etc. from here on out its all gravy. with so much potential, and so many options, they can really start being creative. I think they can now turn the corner as a satellite company, and can now be a media content provider.

Mar 23 04:04 PM

[Shaky:]

A dividend? You are crazy if you think they will pay a dividend in the near future.


On Mar 23 06:18 AM holmesnmanny wrote:

> Cool, assuming those fairly nominal numbers come to fruition within,
> say, a year, I think the company would finally be in a position to
> start rewarding the stockholders with a dividend and provide the
> stock price with some stability for a change.

Mar 23 05:19 PM

[Ergen:]

And what makes the iPod so special? Nothing really. Be sure Malone & Co. are well into discussions with Verizon, T-Mobile and other xarriers who live to sell bandwidth. Any smartphone will do/

Mar 23 05:46 PM

[itsjust$:]

I notice at the bottom of this you have top Commentators,
it would be cool if you could track/find a contributor
and their comments?....just a thought....got a few that I would like to
see their flip flops and opinions.

Mar 23 06:11 PM

[Siriusbuzz.com:]

It wont be anywhere near 7 million. They will be lucky to get 1 million. UNLESS they give iPhone users incentive to do so... such as, 1 month free. This is more of a value added play and not a new subscriber play.

Mar 23 08:38 PM

[Gregg:]

I'm getting an Iphone this summer so I'm stoked about it.

However, I think it'll just be a mild success. The competition with Slacker, etc makes this a tough swallow to bring on incremental subscribers. For existing subs - fantastic. A good way to keep us around. For newibes, not so much.

Stern fans - already on board.
All of the other content is iffy as far as 'exclusives'.

The big win would be to get MLB and NFL through this App and I doubt that'll happen.

Mar 24 11:07 AM

[nukldrager:]

Perhaps another conversation, but why does apple stay with AT&T?


On Mar 23 08:18 AM machine3 wrote:

> I hope they make an app for the Blackberry Storm
> for those of us that love the iPhone but can't take the lousy service
> of AT&T so we stayed with Verizon.

Mar 24 01:59 PM

[matty3000:]

I don't think anybody gets the point. No one seems to see huge potential with the iphone app. I have an iphone and I will subscribe. If sirius adds a new, slightly lower plan for iphone owners, mark my words, it will blow the roof off.

Mar 24 06:16 PM

[User 382424:]

Matty3000, Amen! I think you hit the point, exactly. I think with the iphone and ipod application and lack of need for equipment it will help increase the subscriber base Sirius needs. There are so many hardware devices out there to pop your ipod or iphone into that Sirius will now be the true radio stream.

Mar 24 09:12 PM

[holmesnmanny:]

And why is that? Cause they lost a whopping 8 cents(insert funny cheeze grin here) last quarter and haven't turned a profit even though they were getting close before the FCC held up the merger?

No problem. You sell your stock to me and I'll bet on the soon to come dividend from a finally emerging positive business model.

Thanks.

On Mar 23 05:19 PM Shaky wrote:

> A dividend? You are crazy if you think they will pay a dividend in
> the near future.

Mar 25 06:57 AM

[The Toy Lounge:]

Is Sirius XM going to make it for sure now that LIberty Media has bailed them out - although at a really high interest rate?

The Toy Lounge of St. Paul MN - thetoylounge.com/radio... - creates iPhone apps for radio stations, eBooks, newspapers, magazines, children's books, and more.

Your radio station can be one of hundreds or thousands on a giant aggregator iPhone app like I Heart Radio or AOL Radio and get lost in the crowd, or you can get your own stand-alone radio station iPhone app and have your own icon on your listeners' iPhone screen. A basic streaming radio app for the iTunes song tagging and ad serving for extra revenue.

Apr 30 10:01 PM