Sirius XM: There’s an App for That 93 comments
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By Brandon Matthews
The XM SkyDock has begun to receive the accolades that I have been reporting would come. Rave reviews of the revolutionary new satellite radio offering are beginning to pour in, as more and more Apple (AAPL) iPhone and iPod Touch owners are coming to the realization that yes……There’s an app for that!
Out of the box, and with a basic XM monthly subscription the SkyDock brings iPhone and iPod Touch owners everything XM offers including CNBC, Major League Baseball, Oprah Winfrey, Opie and Anthony, Mad Dog Radio and all the rest of the exclusive XM lineup including its extensive commercial free music offerings to Apple Devices. Adding the “Best of Sirius” package will add the NFL, Martha Stewart, Howard Stern and lots more! A new marketing campaign dubbed Rock ‘N’ Rewards offers a cash reward for new subscribers of up to $100.00 which will actually pay for the upgrade, although the cash reward can be used for any purpose.
From a consumer standpoint, this is big news. From an investment standpoint, it’s even bigger. It has been no secret that Sirius XM Radio (SIRI) relied heavily on new car sales for far too long. Looking at the numbers that Apple reported just two days ago, it is clear that this new market represents a growth opportunity that dwarfs both the new and preowned auto markets.
Consider that out of 10 million new cars sold annually, approximately half of them are not equipped with Satellite Radio, and the “take rate” of those that are equipped stands at less than 50%. As 100% penetration comes at a snail’s pace through all the major auto manufacturers, subscriber growth will keep a similar pace.
Every new car radio carries with it a cost to Sirius XM whether or not the service is ever subscribed to. There are also issues of revenue share agreements with the automakers that cut into Sirius XM’s earnings and profit potential. All in all, new car sales have created growth and awareness of satellite radio, but that growth, as 2009 has demonstrated, has slowed as auto sales declined sharply.
According to Apple’s press release, the company sold 10.2 million iPods and 7.4 million iPhones in Q3. No number was given regarding iPod Touch devices, but the picture is clear. The company during its press conference also admitted to pent up demand heading into Q4 for the iPhone, due to supply problems that Apple has just recently begun to overcome.
With nearly 30 million iPhones alone being sold annually, the new car sales annual rate of 9-10 million vehicles can potentially be rendered a second tier market for Sirius XM Radio. This quarter may prove to be a historic quarter for Sirius XM Radio, if it can capitalize on this new market of Apple consumers. It may just be as simple as letting Apple consumers know that — “Yes…There’s an app for that!”
Position: Long SIRI
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WHY ARE WE WAITING FOR QUARTER THREE FOR SIRIUS????
QUARTER THREE-- PER MY GOV TAXES DEADLINE WAS SEPT 15TH!!!!!!!
WHATS THE DEAL HERE???
July + August + September = Qtr 3
October + November + December = Qtr 4
On Oct 22 10:17 AM dead elvis wrote:
> DIDNT APPLE JUST RELEASE QUARTER FOUR?
On October 14, it was announced that the employment contract of James E. Meyer, President, Operations and Sales, was extended through May, 1, 2013 at an initial base salary of $950,000 - along with an option grant of 25,184,984 shares at .5752 per share, vesting in 4 equal installments (10/14/2010, 11, 12, and 13).
I interpret this as a vote of confidence by the President of Operations and Sales and an action that places his interests alongside those of all investors in Sirius XM. Keep in mind, the timing of this action and the direct involvement he has with all current developments (positive and improving within Sirius).
Also recognize that virtually all stock option plans automatically adjust for any splits that may occur in the future. Typical language follows: "Recapitalization: Subject to any required action by shareholders, if any, the number of shares to which options [and Stock Appreciation Rights have been or] may be granted under this Plan will be adjusted proportionately for any increase or decrease in the number of outstanding shares resulting from stock splits and reverse splits. The number of shares will be adjusted to the nearest whole share."
Clearly, the actions of the President of Operations and Sales reflect a confidence in the longer term fortunes of the company that are in alignment with those of the company's shareholders.
On Oct 22 10:17 AM dead elvis wrote:
> DIDNT APPLE JUST RELEASE QUARTER FOUR?
>
> WHY ARE WE WAITING FOR QUARTER THREE FOR SIRIUS????
>
> QUARTER THREE-- PER MY GOV TAXES DEADLINE WAS SEPT 15TH!!!!!!!<br/>
>
>
> WHATS THE DEAL HERE???
Sirius Long who is crying for someone in here to get the need for r/s after 3Q results are positive (Hopefully).
Beside international money, corporate money, 401K money, Pension money etc are going to begin (if not already) pouring back into US stock market; and we are missing good long term investors.
WHY DOESN'T ANYONE IN HERE GET THAT SIMPLE LOGIC? Look at the increase in the DOW and S& P in the last few of months. Us Siri longers are missing real investors.
On Oct 22 11:57 AM PROTECT AND SERVE 0310 wrote:
> There you go again Brandon, you talk and the stock drops!!! Stop
> talking so much we know what Siri/Xm is and isn't.
either by car sales, apple, retail or whatever. They subtract churn and come up with a number for new subs and rev. growth. It doesn't matter how one speculates where they come from , but a number
is estimated for growth. Say, 500,000 or 700,000 for 2010 or whatever.
At average $12 a pop there could added $500,000 mil or $700,000
mil in. rev growth. The problem is how management handles it.
No one wants to really look at management's competence. When ever there is criticism some people start defending and
spinning for Mel and Co. It looks like some people are shills for management. Looking at management's role in handling a company
is a part of analysis. Whether it's Lewis at B of A, or Mozilla at
Countrywide, or Greenberg at AIG, or even Bernacke and Geithner.
Management is studied.
The point being even if SIRI grows it's income it comes down to how they manage it. They can blow it on high talent fee's, wasteful
overhead and operating expenses, high salaries and bonuses, and spend it away on bad advertising. This management has shown
a direction to mis-handle the budget and skim off the top for themselves and high cost talent, and maybe corruption. Some of Mel and his team supporters on this blog say go to the SEC with eveidence. If the SEC couldn't get eveidence on Madoff what makes anyone think they could get eveidence on SIRI.
Something fishy is up with SIRI. When ever the p/s gets a boost
something knocks it down. Day traders or shorters, maybe. But
there's something else going on here.
How many people here new Liberty/Malone was in a back room deal? So what makes people think some other back room deal isn't going on now?
Think about it. Why would Liberty put up the money. Were they planning to get there money back when the future profis roll in?
If that's the case that the future profits look strong wouldn't the market see that and realize the p/s and p/e will grow and now's the time to buy stock. But they don't. And when there is up momentum the p/s gets knocked down.
I still contend that the back room play between Mel and Co. and Liberty is to play the leverage game. That is to force a r/s by
keeping p/s down and then when new shares become available sell at a higher price and leverage SIRI again. This way Liberty gets its big payout and Mel gets funds from the selling of shares again.
I know people are going to attack this idea and support Mel etc., but there has to be an explanation for the way p/s moves on SIRI.
Because it's pretty obvious there will be rev. growth with new subs.
It depends how management handles it. P/s should rise unless there is something else going on. And I think there is.
Now watch I'm going to get blasted by certain people who want to shoot this down. Mel supporters I guess.
Also people should stop throwing s--t back and forth at each other
on this blog. It adds nothing to the discussion. Also, Siri-doom wants attention and why do some people give it to him.
All we need if for SiriXM to start to look out for its shareholders. I feel the same Jerrold, this is getting old. No common sense here just blah blah blah about selling this and that.
We need management to make moves that benefit the shareholders, new products are nice and of course especially when they are an accessory for a hot product. But it is not going to turn the company around, just give it a little more PR.
People want Sirius Radio, its a great product at a very affordable price. Now get this stock out of penny status!
On Oct 22 12:41 PM Jerrold Williams wrote:
> I think all credibility with this blog has been lost at this point.
> For this guy to say that this SKYDOCK opens up a new market of over
> 30 million a year iphone alone users is ridiculous!!! These people,
> assuming they have cars, have always been in the market for satelite
> radio!!!If they wanted SIRIUS XM they could have gotten it with or
> without an ipod touch/iphone and SKYDOCK! ...In fact you can get
> a better less expensive dock and play if you don't own an ipod touch/iphone...This
> whole deluded article seems to make the assumption that you get SIRIUS
> XM with a new vehicle...or now you can get it with your apple device.
> Retail (skydock included) has been dead because people need to have
> a trial of this service before they are willing to spend money on
> a monthly premium. Most people don't want to buy the device and then
> spend monthly...SKYDOCK is $119.00 and dropping. Cell phone, you
> get free or low cost, SIRIUS XM device with new car is free , cable
> tv converter is free when you pay monthly, satelite tv free....etc.....Now
> this Skydock millions are going to pay over $100.00 for the priveledge
> of paying a subscription for radio? No!!!A few will, but not nearly
> as many as would pay a subscription because hardware was included
> in new or used car and then given a free trial....All this crazy
> talk while the stock keeps tanking.....I understand you are long
> SIRI....but at least show some responsiblity to talk sense!!! This
> same author wrote in an article that this SKYDOCK will be in big
> demand worldwide including China and Switzerland!! even with no satelite
> signal!!!Totally irresponsible journalism..
On Oct 22 01:10 PM dayworker wrote:
> Everyone always speculates on how many new subs will be added
> either by car sales, apple, retail or whatever. They subtract churn
> and come up with a number for new subs and rev. growth. It doesn't
> matter how one speculates where they come from , but a number
> is estimated for growth. Say, 500,000 or 700,000 for 2010 or whatever.
>
> At average $12 a pop there could added $500,000 mil or $700,000<br/>mil
> in. rev growth. The problem is how management handles it.
> No one wants to really look at management's competence. When ever
> there is criticism some people start defending and
> spinning for Mel and Co. It looks like some people are shills for
> management. Looking at management's role in handling a company<br/>is
> a part of analysis. Whether it's Lewis at B of A, or Mozilla at
>
> Countrywide, or Greenberg at AIG, or even Bernacke and Geithner.
>
> Management is studied.
> The point being even if SIRI grows it's income it comes down to how
> they manage it. They can blow it on high talent fee's, wasteful<br/>ove...
> and operating expenses, high salaries and bonuses, and spend it away
> on bad advertising. This management has shown
> a direction to mis-handle the budget and skim off the top for themselves
> and high cost talent, and maybe corruption. Some of Mel and his team
> supporters on this blog say go to the SEC with eveidence. If the
> SEC couldn't get eveidence on Madoff what makes anyone think they
> could get eveidence on SIRI.
> Something fishy is up with SIRI. When ever the p/s gets a boost<br/>something
> knocks it down. Day traders or shorters, maybe. But
> there's something else going on here.
> How many people here new Liberty/Malone was in a back room deal?
> So what makes people think some other back room deal isn't going
> on now?
> Think about it. Why would Liberty put up the money. Were they planning
> to get there money back when the future profis roll in?
> If that's the case that the future profits look strong wouldn't the
> market see that and realize the p/s and p/e will grow and now's the
> time to buy stock. But they don't. And when there is up momentum
> the p/s gets knocked down.
> I still contend that the back room play between Mel and Co. and Liberty
> is to play the leverage game. That is to force a r/s by
> keeping p/s down and then when new shares become available sell at
> a higher price and leverage SIRI again. This way Liberty gets its
> big payout and Mel gets funds from the selling of shares again.<br/>I
> know people are going to attack this idea and support Mel etc., but
> there has to be an explanation for the way p/s moves on SIRI.
> Because it's pretty obvious there will be rev. growth with new subs.
>
> It depends how management handles it. P/s should rise unless there
> is something else going on. And I think there is.
> Now watch I'm going to get blasted by certain people who want to
> shoot this down. Mel supporters I guess.
> Also people should stop throwing s--t back and forth at each other
>
> on this blog. It adds nothing to the discussion. Also, Siri-doom
> wants attention and why do some people give it to him.
"Said woman take it slow
It'll work itself out fine
All we need is just a little patience
Said sugar make it slow
And we'll come together fine
All we need is just a little patience.
Patience...
oh yeah yeah
just a little patience"
On Oct 22 09:59 AM ScroogeMcduck wrote:
> There's been an app for that. What Sirius needs is an additional
> source of income. Perhaps a radio with a bigger screen offering visual
> advertising the way pandora does.
On Oct 22 11:57 AM PROTECT AND SERVE 0310 wrote:
> There you go again Brandon, you talk and the stock drops!!! Stop
> talking so much we know what Siri/Xm is and isn't.
1) allow other companies to integrate satelite in their products. Other companies could make SIRIUS XM devices and then SIRIUS XM would be the content provider.
2) Give customers A La Carte option.
3) Don't raise prices for 3 years...
Now, more than a year later, they haven't opened up their technology so other companies can create devices.........
The A la carte is only available on select radios and is very limited..
They weren't suppose to raise prices...yet additional radios increased $2.00 each, they put on a "music royalty fee" for each radio. They added charges for "premium internet"....I just replaced a radio and was charged a $15.00 "swap fee"!!! I paid it due to getting the radio at a great price..(xmp3 for $70.00...thanks Oprah!)...But they insist on nickel and diming current customers...and up to this point they are neglecting reaching out to new customers!!!Practically no advertising has been done!! This skydock is not the savior of the company.....!!IThere are many more millions of people without apple devices that drive than have an apple device!!!
For example....A friend of mines' mother loves gospel music and christian talk. She drives an old car and willl never have an ipod...she is over 55 years old. This age group and vehicle type is a prime prospect. Promote to them a product like the STRATUS 6, with A la carte....In this case she would get her Gospel channels, Religous talk, etc..with a $69.99 device...and only $6.99 per month....Good deal!!!!Yet no promotion of this type of deal to "average" drivers, with average cars... People focus on a $119.00 dock that requires a minum $12-$15.00 subscription, along with a $200+ apple device!!!We are in a recession!!!Market to these underserved "niche" markets! We are still in the Paradigm that you have to have a new or certified used car, You have to have a $200+ ipod and then a $100.00 dock...I have a 1995 buick, no Ipod and I have a great XM radio installed...beats any dock or pre-installed radio in any luxury car! (XMP3)...This is not a luxury item...It is radio!!very affordable to everyone if marketed correctly...Do they have a marketing department? Mel K, get out of the device business and focus on content and promoting that content to everyone who likes to be entertained away from the tv!!!Let other companies research and develop devices to use your content!!
Will we see more major technology firms following the lead of Apple in building a business model around the development of numerous Apps that appeal to consumers - in effect - an expanding universe of Apps that appear on more networks and devices?
If so - as I believe will happen rather rapidly in coming years - what will this mean for Sirius XM, in terms of opportunity for expansion?
What do you think the potential will be for Sirius
XM to work hand-in-hand with these new Apps and devices?