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By Brandon Matthews

Another new patent application has hit the U.S. Patent & Trademark Office, which justifies Sirius XM’s claim that automakers are excited about Satellite Radio 2.0. This just may guarantee the longevity of Sirius XM Radio (NASDAQ:SIRI) for years to come. The patent application is a refinement to a previously reported patent, that indicates Sirius XM is working with automakers to provide specific data services to complement its Satellite Radio service. Bear in mind that a requirement for receiving Sirius or XM data services is that a subscription to Satellite Radio must be maintained. Data services from Sirius XM are in addition to, not in lieu of, a Satellite Radio subscription.

…When using SIRIUS XM fuel price data, the cheapest nearby fuel/energy prices can be researched, and this data can be correlated with FuelEQ to provide the best financial option for the user or driver.

Over the years, a certain complacency has set in regarding specific cars and trucks that include Sirius or XM Radio. Meanwhile, more and more car companies are introducing the Sirius or XM navigation and data services in their 2011 offerings, likely attributable to the introduction of Satellite Radio 2.0 to be unveiled later this year. While “the street” is focusing on Sirius XM from an audio entertainment perspective, it is missing the much larger picture that is developing. Consider the words of Sirius Canada CEO Mark Redmund in a recent interview:

We’ll start to bring additional services to customers there, whether it’s navigation functions; data services that allow you to find a movie theatre and see what’s playing, on the screen in your car; detection when you’re coming up to a red-light camera—we will be able to flash that; sports and stock tickers; to a variety of data services and, potentially, security services coming in the future. – Source

Just in the last week, the Sirius XM navigation systems have been introduced on Chrysler, Jeep, Dodge, Ford, Nissan and Kia vehicles, in addition to others. These are just in the last week. With gas prices set to soar, and 2011 setting up to be the year of the electric vehicle, Sirius XM is reinforcing its dominance in the dashboards of not just gasoline powered vehicles, but electric and hybrids, as well. The following application was sent to me by Rod Gunsauley. It suggests a means to provide drivers with data services that focus on fuel economy in ways that have never been seen before. It includes must-have information for drivers of electric vehicles utilizing fuel equivalency data rather than miles per gallon (MPGs).

In exemplary embodiments of the present invention, the notion of Fuel Equivalency or “FuelEQ” can be defined and utilized. Fuel Equivalency is a cost per unit distance that takes into account both (i) the cost of each available fuel or other energy source, as well as (ii) the operating efficiency using each of such fuels or energy sources. Thus, it is a much more accurate assessment of operating cost than mere “miles per gallon.” It is noted that although the examples provided herein generally deal with gasoline at various octane grades and/or in different mixtures (E85), exemplary embodiments of the present invention are not limited thereto. “Fuel” or “Energy Source” as used and contemplated herein is not limited to various grades of gasoline or gasoline mixtures. Rather they can include other fuels or energy sources such as, for example, ethanol, electricity, natural gas, hydrogen (e.g., liquid or gaseous), and other sources of propulsion as are, or as may be, used in a vehicle.

The following abstract is the opening presentation of the filing:

A fuel information data service system is presented. In exemplary embodiments of the present invention a fuel information data service can include a controller operable to receive information regarding costs of various types of fuel, and to correlate such costs of fuel information to actual operating costs for a given vehicle, based on a known consumption efficiency for a plurality of types of fuel for that vehicle, to calculate a FuelEQ or fuel equivalency for each fuel offering. In exemplary embodiments of the present invention an exemplary system can further include a presentation device coupled to the controller where the controller is further operable to present such FuelEQ information expressed as a cost per distance traveled. In exemplary embodiments of the present invention a location finding module can be provided, and in addition to displaying various fuel costs and corresponding FuelEQ values, a fuel data system can also display distance and direction data for each available fueling station to a user. In exemplary embodiments of the present invention such a location finding system can send navigational directions to a selected fuel station based on a user selection. In exemplary embodiments of the present invention an exemplary system can alert a user when the vehicle is low on gas and has passed within a predetermined distance to a refueling station with a price lower than a threshold Fuel EQ value (value of cost per distance for fuel) set by the user. In exemplary embodiments of the present invention a navigation system can be used as a location finding module, to both determine distances and direction to a variety of local fueling or energy stations, as well as to calculate and display navigational directions to a selected fuel station in response to a user selection.

Certain aspects of the application include details that certainly come directly from automotive engineers. For instance, the filing goes to great lengths in expressing details of how using lower grade gasolines in engines designed for high grade gasolines can cause actual M.P.G.’s to decrease 3-5 M.P.G. The new data service will allow for the input of the specific octane used to more efficiently calculate the cost of fuel consumed.

[0017] Next described are various exemplary use cases of exemplary embodiments of the present invention. In a first example, an analysis is done between regular gasoline and various premium grades of gasoline. Often times premium vehicles require premium gasoline for optimum efficiency. When gas prices rise, however, drivers tend to purchase lower grades of fuel hoping to save a few dollars. However, consumers may not know that the advertised fuel economy for the vehicle is based on premium gasoline, if in fact the engine was designed for premium fuel. As a result, fuel efficiency is generally decreased when using lower octane fuels. This effect is normal and by design, and is due to sensors that are designed to detect engine detonation which often occurs when using low grade fuel; these sensors will counteract detonation by minimizing the uncontrolled combustion that low grade fuel can generate inside a high power engine. The net result of lower than specified octane levels in fuel thus yields noticeably less engine power and fuel efficiency for the automobile. It is known, for example, that in such instances the mpg can be reduced by as much as 3-5 miles per gallon when using regular octane versus premium in a vehicle whose engine was designed for premium gasoline. Thus. when calculating the actual cost of driving the vehicle using a lower octane fuel, it is observed that the Fuel Equivalency–i.e., the consumer cost per mile for the specific vehicle in question, is more advantageous for premium fuel versus regular fuel, for example. Table 1 below shows that although premium gasoline may cost more per gallon, it actually constitutes a more cost effective fuel source taking into consideration the rated fuel efficiency for the vehicle for the respective types of fuels. In general this will depend upon the relative costs of premium and regular (or other lower octane fuels), as well as the fuel efficiency at each octane level.

Not only can these costs be monitored in a vehicle, the information can be downloaded to a computer or smartphone via an APP. The application is chock full of information that will clearly define Sirius XM in the years ahead. These ancillary services could have dramatic positive effects on revenue, cash flow, ARPU, subscriber retention and churn, and promise to be a game changer for Sirius XM.

View full patent application here.

Disclosure: I am long SIRI.

Source: A Game Changer for Sirius XM: Data Services for Electric Vehicles