5 Reasons to Anticipate a Sirius XM iPhone Application

Includes: AAPL, SIRI
by: Rad Sat Daily

Sirius XM Radio (NASDAQ:SIRI) will soon release an application for the iPhone (NASDAQ:AAPL). The company said on its Q4 2008 conference call that it will release an application for the iPhone before the end of the second quarter of 2009. This means that the Sirius XM iPhone application could be released anywhere between April and June of 2009 to the Apple App Store. The Sirius XM iPhone application is currently being beta tested according to the satellite radio company. The application will be a free download from the Apple iPhone app store.

You have to believe that a Sirius XM Radio iPhone application will be a huge success. Other companies such as Slacker, Last.fm, Pandora, and Clear Channel (NYSE:CCO) already have successfully launched applications for the iPhone. Sirius XM Radio is a little late to the party, mostly due to having its hands tied in merger activities by the FCC for a year and a half, but you have to believe the Sirius XM Radio iPhone application could be a huge success.

Here are the top five reasons why we believe a Sirius XM iPhone application will be a huge success ranked from least important to most important reason.

Reason Number 5: Commercial Free Music

A Sirius XM Radio iPhone app would offer commercial free music in which an individual will not have to pre load music in an iPod like manner or create their own channel like other iPhone streaming applications like Pandora or Slacker. The individual would be able to randomly discover the music without commercials or pre thought.

Reason Number 4: Uncensored Music and Talk Radio

Other streaming applications on the IPhone may not necessarily play uncensored versions of songs or have the benefit of uncensored talk radio. Currently an IPhone Application called “Talk Radio” exists but the application only plays talk radio, no music. Pandora and Slacker have the opposite issue they play music but no talk radio. Sirius XM Radio’s iPhone application would offer uncensored music and talk radio in a single iPhone application.

Reason Number 3: Exclusive Content

Sirius XM Radio has certain exclusive content that you can not find anywhere else. An example of this is Opie and Anthony who recently were axed from CBS Radio, after CBS Radio (NYSE:CBS) decided to migrate to a Top 40 radio format. Currently the only place that Opie and Anthony can be heard is on Sirius XM Radio. There are countless other examples of content that can only be heard on Sirius XM Radio like Mad Dog Radio, Oprah Radio, Foxxhole Radio, E Street Radio, and countless others. Each one of these exclusive content acts have their own individual following which would bode well for a Sirius XM Radio iPhone application.

Reason Number 2: Fans Have Been Waiting for an Apple and Sirius Connection for a Long Time

For years now fans of satellite radio has been hoping for an Apple and Sirius XM Radio connection. Through the iPhone's SDK this connection will now become a reality. A Sirius XM Radio iPhone application would be the first satellite radio product commercially available for an iPod. The Sirius XM Radio iPhone application would be available on both the iPhone and the iPod touch.

Reason Number 1: Howard Stern

It is said that Howard Stern had about 12 million listeners while on terrestrial radio. We can assume that some of those 12 million terrestrial radio listeners currently do not subscribe to satellite radio. A Sirius XM IPhone application will give another means for displaced Howard Stern fans to reconnect with Stern. Howard Stern already paid for himself with satellite radio listeners but he can effectively pay for himself again via the Sirius XM Radio iPhone application.

Because of the 5 reasons noted we believe the Sirius XM iPhone application will be a huge success. According to Sirius XM Radio’s President of Operations and Sales Jim Meyer, on the Sirius XM Radio Q4 2008 conference call, “When released, this application will permit an estimated 7 million US iPhone users, and additional iTouch users to access SIRIUS and XM internet content.” A time frame for the 7 million US iPhone users was not given by Meyer, but let’s assume that Meyer’s 7 million number one day becomes a reality. Sirius XM recently added a $2.99 additional monthly charge for its internet stream for existing subscribers. Let’s assume that all 7 million of those US iPhone application users are existing subscribers, this potentially would add an additional $250 million a year in revenue to Sirius XM Radio’s balance sheet. Ok, now let’s more realistically assume that 25 percent of those 7 million Sirius XM Radio IPhone app users become new subscribers to the satellite radio service. In this scenario approximately 460 million dollars in additional revenue would be brought in to the satellite radio company’s balance sheet via an iPhone application.

The pending Sirius XM Radio iPhone application potentially has the opportunity to bring in an additional $250 to 460 million or more in revenue for the satellite radio provider. Based on the reasons given not only will a Sirius XM Radio iPhone application be hugely popular for the satellite radio provider but it also has the potential to be a financially lucrative additional stream of income.

Disclosure: Author holds long positions in SIRI, AAPL