iPhone Apps' Launch of Siri XM: A Powerful Combination 40 comments
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For those that have followed satellite radio for a long time, Apple (AAPL) has always been seen as a brass ring of sorts. Over the years many investors were clamoring for a deal with Apple that never came to fruition. It just seemed right and natural to combine the live aspect of satellite radio with the features of the iPod and iTunes. iPods lacked a music discovery aspect that satellite could deliver. Perhaps the fact that a deal was never done was for the best. Apple would have demanded their pound of flesh in terms of revenue share, and either Sirius (SIRI) or XM, competing staunchly for an advantage, would have been forced to whittle away yet again at the bottom line.
Today is a different day. We now have Sirius and XM merged, and the iPod has graduated to the iPhone. No longer will iPods need to have satellite radio chipsets installed at a cost to Sirius XM. Instead, the service can be delivered over the Internet and directly to iPhone and iTouches.
In their quarterly call Scott Greenstein hinted that the application would feature the ability to stream more than just the Internet feed, but also stream additional channels for talk, sports, and news. Greenstein’s comment likely was overshadowed by the fact that the company actually announced that the long awaited application would actually be delivered in Q2.
Many may not be aware that the Internet feed of satellite radio excludes many channels that are available in the standard satellite feed. News channels such as Fox, CNBC, etc. are not in the Internet package. Nor is there any live sporting coverage (Notre Dame Football is featured) or traffic and weather.
It would appear that what Greenstein insinuated was that the iPhone application would deliver a more robust line-up. This is potentially big news. Imagine if you could catch your favorite team's broadcast on your iPhone. Wouldn’t it be great if channels such as Fox news were included in the service? While the company was not specific about the content offerings that would be included, they did say that the offering would be “enhanced”. Perhaps the timing of the iPhone application and the rumored Baseball news becoming available to Sirius Subscribers has some merit.
In preparation for this launch, Sirius made some great business decisions, and dropping the Internet feed for a standard subscription, while raising the Internet feed sound quality was the first. Now, if you want to listen to Sirius XM over the Internet, you need to pay an additional $3 per month. Yes, consumers may feel a bit scorned, but from a business standpoint, the move makes perfect sense. If the iPhone application delivers a level of content that rivals the satellite delivered service, subscribers that already have iPhones will jump at the ability to combine their satellite radio service into their cell phone. This will deliver an additional $3 per month in revenue, and increase metrics such as ARPU (Average Revenue Per User).
The next positive aspect of the iPhone application is that there is no satellite radio chipset to subsidize, nor does the company spend money on manufacturing and distributing radios. This will trim costs substantially, and have a positive impact on the SAC (Subscriber Acquisition Cost) metric. The iPhone application does not require the company to pay for space on retail shelves, and does not require a sales force. If your iPhone breaks, you will call AT&T (T), and not Sirius XM customer service. All around, an application for the iPhone and iTouch saves the company huge amounts of money.
What does the company do with that saved money? Well, they can take some of it and market their new iPhone app, but the real brilliance here is that Apple markets itself. Sirius XM does not need to sell iPhones. They simply need to make the millions that have iPhones aware that an awesome new application is ready and waiting to be downloaded. A simple yet cost effective ad campaign can perhaps deliver more bang for the buck than anything previously seen (with the exception of the one year Stern promoted Sirius while still on terrestrial radio).
The iPhone app will also appeal to non-subscribers. If you have an iPhone or an iTouch, do you really want to be tethered to yet another device? Now you won't have to be. You now have an all-in-one solution. Properly marketed, Sirius XM could garner a whole new set of subscribers to the pool.
The iPhone also has positives in terms of the consumer. The consumer does not have to buy a radio. The entry cost to get involved in satellite radio is no longer a hurdle because there is no radio to purchase. Consumers also do not have to worry about getting a radio installed or running an antenna. Becoming a satellite radio subscriber is now as simple as downloading an application!
With millions of iPhones and iTouches out there, the potential is substantial, but before people run off with visions of 5,000,000 new subscribers in their head, let’s apply some realistic parameters. The iPod phenomenon is biggest in the city. Walk around New York, and you see personal music players, iPhones, etc. everywhere. New York is a city where people don’t drive, they take the train or a taxi. The appeal in a city such as New York will be huge. In the suburbs, people tend to drive more, and thus, get a chance to listen to music, satellite radio subscription, etc. on their commute. These people, in my humble opinion, are less likely to make the jump.
The bottom line is that an iPhone app will be a revenue generator as well as a cost saver. That is a powerful combination that can not be ignored. Look for the iPhone app to be launched in early June.
Disclosure: Long SIRI
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If your a trader, then yes, you should have, obviously...
Investors dont have to worry about the ups and downs... just make sure you hold shares in a core, and over core. Sell the over core on up swings, and buy on dips, always holding a good core position...
or just believe in what you know about the company, dont listen to bashers or pumpers.
you invested in this company for a reason, go check those reasons..
if there still valid, hang in there...just one mans opinion of course..
biilly gay bob is a joke...
he would have said what he said regardless of where the price was or going, if you call down all the time, yes, you will be right...
where was he on the huge upswings? exactlly....
not telling me to book profits at .63 was he...
but i did anyway, because who listens to any one named jay boy bob?
But isn't Sirius-XM going to offer this app to other mobile platforms, too. Apple isn't getting any exclusive deal on it, are they?
I don't think a few dollars a month is a big deal, but I still wonder how much time I'd get to listen to it. There are so many other things to do once you have an iPhone or iPod Touch. Games alone can sap up hours and hours without even counting things like listening to one's own music. I'll just have to wait and see.
On May 13 12:52 PM Mr. Stupid wrote:
> I'm getting scared. This stock has only gone down. I should have
> done what Jay boy billy said I guess.
>
> What should I do?? Should I hold or sell now before I lose everything??
>
>
> Frank
Long SIRI- PEACE
On May 13 02:05 PM relmar2003 wrote:
> Mr. Stupid, what are you babbling about? are you a day trader? If
> not, then start buying at these levels.....
> If your a trader, then yes, you should have, obviously...
> Investors dont have to worry about the ups and downs... just make
> sure you hold shares in a core, and over core. Sell the over core
> on up swings, and buy on dips, always holding a good core position...
>
> or just believe in what you know about the company, dont listen to
> bashers or pumpers.
> you invested in this company for a reason, go check those reasons..
>
> if there still valid, hang in there...just one mans opinion of course..
>
> biilly gay bob is a joke...
> he would have said what he said regardless of where the price was
> or going, if you call down all the time, yes, you will be right...
>
> where was he on the huge upswings? exactlly....
> not telling me to book profits at .63 was he...
> but i did anyway, because who listens to any one named jay boy bob?
>
On May 13 04:11 PM 1more4me wrote:
> Did anyone pick up the news that Mel "gave back" 30 million prefered
> share options he was already entitled to? He just said "no thanks-
> SIRI can keep them..." That's 142 million bucks worth that SIRI
> has back in the pot and can now use to compensate others... Geez-
> that's some serious commitment to the Job and success of the companyI!!!
> And- confidence his other PShares are eventually worth way more...
> You go Mel!
> Long SIRI- PEACE
Gotta go catch a wave to get this stock off my mind.
Frank
193 Comments
Follow
OK, We will all see if i'm "LUCKY" AGAIN this week. My predictions:
Friday close - .4089
Mon - drop .04c Actual down - .0089 missed by 77.25%
Tue - drop .03 Actual down - .004 missed by 86.66% Two day total missed by 81.71%
Wed - drop .03 Actual down - .0213 missed by 29% Three day total missed by 65.8%
Thurs - up .02
Friday to end week down to .30
That's my take for this week.
We will see,
JAY BOY BILLY
May 10 09:33 PM |Report abuse| Link | Reply
00
Strike one.
Strike two.
Off 29% day 3 I'll give him a foul tip Still strick two.
Frank
On May 13 10:21 PM Jimmy 1 wrote:
> Hey. I love reading all the posts. I'm also a long time Sirius/XM
> player, made some money and averaged down substantially my balance
> when price went to .13 I now have 40,400 shares. Hoping and planning
> on some serious returns in the not too distant future.This company
> has really withstood some very difficult hurdles. I believe in Mel
> and agree that it's all about his legacy as well. This company will
> explode soon and I plan on being along for the ride. But I do need
> some advice from all you informed pro Sirius players. I just got
> the Proxy/Voting e-mail and I'm not sure how to vote on the 1 for
> 8 split. Can anyone offer some help on this one. Thanks, Bob
Apple announced that the next version (3.0) of the OS for the iPhone/Touch will allow developers access to either wireless and/or wired third party hardware. Even though the Sirius/XM iphone application available is solely for internet based Sirius/XM content, it will be possible for Sirius/XM to release an antenna (not sure if any other special hardware would be required?) which you "connect" to an existing iPhone. All the user interface would be via an iPhone application.
Sirius can have their iPhone cake and eat it too. Sirius XM could give away the "hardware" piece and iPhone application to access it only to those who sign up for satellite service! Okay not quite as slick as being built in, but the next best thing.
Cheers - Argosy
Apple announced that the next version (3.0) of the OS for the iPhone/Touch will allow developers access to either wireless and/or wired third party hardware. Even though the Sirius/XM iphone application available is solely for internet based Sirius/XM content, it will be possible for Sirius/XM to release an antenna (not sure if any other special hardware would be required?) which you "connect" to an existing iPhone. All the user interface would be via an iPhone application.
Sirius can have their iPhone cake and eat it too. Sirius XM could give away the "hardware" piece and iPhone application to access it only to those who sign up for satellite service! Okay not quite as slick as being built in, but the next best thing.
Cheers - Argosy
Please. I need help with my stocks purchase and want to know what's in store for futures.
Frank
Relax. Go get a hobby. Teach your kids to play golf or something. Come back in a few months and enjoy your windfall.
- Added monthly charge. I know it's only 3 bucks but still. I already pay for the service, why should I have to pay again?
- Signal availability. Without an antenna, I am going to have to rely on 3G/Edge service to listen. I don't know about you but 3G service is spotty. Edge service is OK, but will it bring clear radio that doesn't cut out?
- If I'm thinking about how the App will replace any of my sirius devices and I'm hard-pressed to find a use for it. In the car, I have already invested in units that are hooked up with an antenna so why would I use my iPhone? At home I have already invested in docking stations to hook up a unit to my stereo.
So, I guess I could use the App if I'm away from my home or car, have a good 3G signal and have headphones with me. Being that I commute by car to work, I really don't know I'd ever be in that many situations that would warrent spending $3/month. Obviously this is just my personal situation but if you are not in NYC, I'm finding it hard to see the value for existing customers.
SELL SELL SELL SELL
BTW... word on the street is that Siri is getting it's rating dropped to AVOID by tuesday next week.