What Will the Soon-to-Be-Released iPhone App Mean for Sirius XM Investors?

By Rick King

The day will be June 18, 2009. That is the rumored day of the release of the Sirius XM (SIRI) iPhone Application. In a turnaround of monumental proportions, the struggling satellite radio company that nearly ended up in bankruptcy a few months back will now be streaming music to millions of iPhones worldwide. Predictions for numbers of iPhones to sell in 2009 range from 10 to 45 million. Sirius XM Radio currently has an estimated 19 million subscribers, and has just begun to close the profitability gap after one of the longest corporate mergers in recent history.

So what does all this mean for Sirius XM Radio investors? The common shares of the company have been under siege for most of this past year, and now retail investors will likely realize some actual returns on their investments. All this despite widespread short-selling amidst the company’s billions of outstanding shares.

The potential revenue yield from this shift in ideology for Sirius XM Radio toward smart phones and wi-fi as a whole is daunting. We’ve already seen increased returns from merger synergies, and efficiency at Sirius XM Radio has been improving weekly if not daily. Throw in a way to easily double its subscriber base – and you can quickly see how this casts a serious ray of hope on chances to begin knocking down outstanding debt.

From a user’s perspective – the world’s addiction to Apple’s (AAPL) iPhones and iPod Touch are now paired with the best commercial-free radio content available. Howard Stern, easily the company’s bread winner, will now be able to reach listeners worldwide at the touch of a screen.

Ponder this thought: Who says they will stop with the iPhone? Many investors may already have forgotten that the last shareholders meeting mentioned “the iPhone and other Smart Phones.” I can only think this will be a serious blow to the terrestrial radio industry.

Position: Long SIRI

Comments

[Neal Barkett:]

Rick, great article. If anyone wants to read something that shows how strong the potential can be for Sirius Xm. pick up the latest copy (June 6th edition)of "The Economist" and read the article about Marty Cooper. Who's Marty Cooper? Marty Cooper was the main force that brought portable cell phones into our lives. If you get the chance to read this article it will open your eyes to give a glimpse on where we are headed in the tech arena. After reading about this amazing individual you can get a feel for the potential of a company like Sirius Xm. While this article doesn't even mention Sirius Xm, if you have any forsight you will be able to connect the dots and start to see a bigger picture of where companies like Sirius are heading. Very exicting & interesting stuff!

Jun 17 10:41 AM

[MrMayhem4:]

I think that people will almost certainly flock to this. It's cheaper than buying a sat receiver and installing it into your car when a person could just hook up an aux cable form the headphone jack on the iPhone into their car. Surely Sirius will gain subscribers form this move.

Jun 17 02:49 PM

[SatWatcher:]

Sirius XM has had their service available in this format (to cell phone/blackberry users) for some time - why will iPhone users flock to Sirius when other cell users have not?

Jun 17 03:33 PM

[VMx:]

SatWatcher - First, because the target iPhone user cares about this functionality, which isn't true of the average Blackberry user. A Sirius/XM option is squarely in the Apple demographic. Second, I have a Blackberry and I can't imagine trying to listen to satellite radio on it. I can barely use it as an MP3 player. I also have a Sirius stiletto and that's not a great player either - plus it's a different device. Satellite radio functionality will actually get me to buy an iPhone.

Jun 17 04:36 PM

[relmar2003:]

SATWATCHER.
The content.
XM app is bare bones, and only like 6.99 or something. THe IPHONE app will actually have MORE exclusive content(20 new channels of exclusive content) than the sat. signal. Not a comparison. And actually, the blackberry XM app was #4 a few months ago. Thats with just XM and no new 20 channels. Plus its only 2.99 to upgrade for it, and now for 14.99 you get it all. Sat, internet, iphone, listen to your sat anywhere, anytime. Demian wrote an article how you can even work it that the iphone can replace your sat radio even in your house, hook it up to your computer, speakers, home system, anything. It will be great.

Jun 17 05:30 PM

[mlongj:]

Things are continuing to look better and better for SiriusXM. This is just the beginning of a huge turnaround. Just wait until all the smartphones have the application. The future is very bright indeed.

Long SiriusXM

Jun 17 05:38 PM

[thevoice@vo...:]

I have to agree with MRMAYHEM, this is an excellent opportunity to increase members subscriptions for $3.

Jun 17 05:53 PM

[CoolHead:]

Relmar2003,

I agree that SiriusXm is well positioned and finally that the SP is moving up. What is your take on where we go from here? Is this time to sell on the news and then buy back on a pull back? I do my due diligence but I also know that you usually have a very good handle on the pulse of this stock so I am interested in hearing what you think.

Thanks Relmar! Say hi to Cos1000 and the gang for me will 'ya?


On Jun 17 05:30 PM relmar2003 wrote:

> SATWATCHER.
> The content.
> XM app is bare bones, and only like 6.99 or something. THe IPHONE
> app will actually have MORE exclusive content(20 new channels of
> exclusive content) than the sat. signal. Not a comparison. And actually,
> the blackberry XM app was #4 a few months ago. Thats with just XM
> and no new 20 channels. Plus its only 2.99 to upgrade for it, and
> now for 14.99 you get it all. Sat, internet, iphone, listen to your
> sat anywhere, anytime. Demian wrote an article how you can even work
> it that the iphone can replace your sat radio even in your house,
> hook it up to your computer, speakers, home system, anything. It
> will be great.

Jun 17 06:07 PM

[lmaze:]

Coolhead we are all at Satwaves.com Enjoy it tonight!

Jun 17 08:13 PM

[jmsithy:]

He isnt doing anything with you He does not Hang out with bashers AKA Mr. Stupid or Frank & Beans what ever you want to call yourself


On Jun 17 08:25 PM Jmsithy. wrote:

> Hi Relmar, I sorry about disagreeing with you earlier. I make it
> up to you. Promise bud. We still buds right?
>
> What are you doing tonight?
>
>

Jun 17 11:07 PM

[Jay Boy Billy.:]

I should of stayed in, should of listen to Relmar and everyone else. We at least I got my DVD of Shock Stock just to remind me that I was one of the traders that caused the stock to almost go bankrupt. I am sorry for everything I have done and I appologize to Prsident Obama as well for causing the Great Crash of 2008

Frank

Jun 17 11:16 PM

[Sovestor:]

iPhone will crush all other phones so badly. Other phone makers now are simply 2-3 years behind the curve vs. Apple. iPhone is way too advanced.....way to good....way to go.

Jun 18 03:20 AM

[Dubious Bro...:]

This as per Inside Radio today:

Sat app comes without Stern.
Satellite radio subscribers will be able to listen to Sirius XM Radio programming through their iPhone or iPod Touch under a new application made available today. The app will give users access to 120 channels -- but not satellite radio's biggest star: Howard Stern. NFL football, MLB baseball and NASCAR are also not available.

Jun 18 04:45 PM

[Realist123:]

As is typical, all those high school students thinking they can buy a 35 cent stock, thousands of shares and they feel rich...and then they think the 35 cent stock will go to $10.00 and really make them rich.

you guys are all blind and will interpret anything to convince yourself you'll get rich. This crap has been going on with this stock for 8 years and all the blind dingbats are now down 99%.

Enjoy your massive losses and when it goes broke call me and I'll laugh at your dumb ass.

Jun 30 11:00 PM