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Sirius XM (NASDAQ:SIRI) loyalist longs need something to hang their hats on these days. With the stock in freefall mode since mid-July (SIRI has lost about 28% of its value from July 15th), the permabulls continue to search for the magic bullet.

The latest Great White Hope in the SIRI cult's battle against the world: The prospects of a satellite radio tuner in Apple's (NASDAQ:AAPL) forthcoming iPhone 5.

Rumors continue to swirl that Apple will include not only a satellite tuner, but AM/FM tuners in the next generation iPhone. If it does not occur with iPhone 5, it's probably a good bet that it will sooner or later, given Apple's recent patent on the technology. That said, Apple has plenty of patents and ideas that never come to fruition for one reason or another.

Let's assume that iPhone 5 does include the aforementioned tuners. The SIRI cult is running around acting like this equates to a $5.00 tender offer for the company by Steve Jobs himself. While I would not call radio chips in an iPhone a non-event, it's pretty close.

First, you can already access plenty of terrestrial radio as well as Sirius XM on your iPhone via apps built into the device. Of course, having the chip built into the phone will probably make for easier access. At day's end, however, this is the equivalent of being part of an automobile's dashboard. And we all know that terrestrial radio is in every new car's dash, while Sirius XM stakes claim to about two-thirds penetration.

In-dash penetration is just about as overblown as getting chipped into an iPhone. Like drivers and passengers in a vehicle, iPhone users must feel compelled to punch your button. And, in Sirius XM's case, they'll need to pony up the monthly subscription fee to hear something more than a preview, a promotional trial or just plain dead air. (Of course, working some sort of promotional angle with Apple would make a world of sense, but (A) I am not holding my breath and (B) that's still not a magic bullet).

The lobby group Sirius XM hyperbulls love to hate -- The National Association of Broadcasters (NAB) - has been on the bandwagon to include terrestrial radio chips in mobile phones for awhile. It's a feeble attempt at relevancy and circumventing intense competition from the likes of Apple, Pandora (NYSE:P) and others. Media consultant Mark Ramsey shut the door on that nonsense in this excellent blog post:

Do you know whether you want radio in your mobile devices? Obviously not, according to NAB. Does NAB know that the magic of streaming already makes radio available to you in those same devices, and does so with added features enabled by technology that no FM chip can match?

Obviously not.

Evidently mobile phone manufacturers are stupid, thinking that consumers buy phones because of what fresh features they have, rather than choosing one because it can make their clock radio redundant.

Nobody wants what’s fresh, right? I want my iPad magazine app to be an identical digital version of the paper mag, don’t you? I want my CNN.com to mirror the cable network exactly, don’t you?

The nerve of these manufacturers, thinking that mobile devices are not radios you can talk into but personalized, portable connection devices designed to do what can’t be done other ways, not what’s done other ways by 800 million radios in every home, work, and car ...

One statistic NAB forgot to provide: How are those FM-enabled phones selling? And no matter whether or not a consumer tells you she wants FM in her next phone, the real question is whether FM is a reason to buy one phone over another – and it generally is not. The phone-makers, you see, understand what drives the consumption of their devices while the NAB does not.

In other words, there's an app for that. And if it has not propelled terrestrial radio (or Sirius XM, for that matter) to mobile success, a chip will not do the trick unless the company does the things it needs to do to drive that success.

Then there's the issue of whether or not mobile phone owners actually make use of built-in tuners. In another blog post, Ramsey cited a study of people who have an FM tuner as a feature on their phone. It's a study worth paying attention to, as it could foreshadow what we might see if Apple adopts terrestrial and satellite tuners for a future version ofthe iPhone.

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Of course, the SIRI cult will point to superior "content" as the main reason why iPhone users, for instance, will flock to a satellite tuner even though they have eschewed FM tuners in favor of personalized radio apps from the likes of Pandora and single-station apps. Again, this does not wash. The opportunity for Sirius XM's content to make it a clear-cut winner on iPhone and other mobile devices has been around for some time. Howard Stern even touted it as a big reason for his excitement upon signing a new five-year contract.

If you do radio and have not had success on iPhone with your app, don't expect a chip to be much of a game-changer. Just as being in-dash does not mean much in the grand scheme of things, being "in-iPhone" does not either. Many buttons collect dust on a dashboard. And plenty of apps and other features go unused and unexplored on an iPhone. Throngs of iPhone users will not run over one another to subscribe to Sirius XM just because it's available, in a slightly different fashion, on their phone. No amount of spin, hope or distortion can change that reality.

To think that a chip on an iPhone opens some sort of Pandora's box to success is to think like the typical terrestrial radio company. If Sirius XM wants to see success on cool, hip platforms such as iPhone, it needs to start acting like the type of innovative company that commands success via these progressive content delivery systems. At this point, it does not appear that the tech/Internet/new media culture pervades the halls of Sirius XM like it does at innovators Apple and Pandora. It will take more than a chip in an iPhone to change that.

Disclosure: I am long P.
Source: Why A Satellite Tuner On iPhone 5 Means Little To Nothing For Sirius XM