By Demian Russian
The combined strengths of an Apple (AAPL) and Sirius XM (SIRI) partnership are now becoming even more clear. In my last article, I explored the possible synergies between the two companies – the potential of the satellite radio provider breaking into the iTunes dashboard and how the looming Q2 release of the Sirius XM app could turn the over 37 million iPhones and iPod Touches out on the street into the new transistor radios of this generation. This time I will delve deeper into what Apple’s coming iPhone/iPod Touch OS 3.0 update will mean for Sirius XM and its soon to be released iPhone/iPod Touch app.
While the ability to stream Sirius XM’s internet feed on the iPhone and iPod Touch carries much excitement, there are those that are quick to point out that the internet channel lineup is lacking some of the content of Sirius XM’s full satellite lineup. While it is true that the internet feed is somewhat music-centric and lacking some of the news and sports programming of the full satellite lineup, it could also be argued that Sirius XM’s original and most popular content is offered through the internet feed — including Howard Stern, Oprah Winfrey, Martha Stewart, Theme Time Radio Hour with Bob Dylan, Tom Petty’s Buried Treasure, POTUS Politics, NPR and CNN.
The reason that some news and sports content is missing from Sirius XM’s internet feed is most likely due to contractual licensing agreements with those content providers. While Sirius XM’s Chief Content Officer, Scott A. Greenstein, did say during the Q1 conference call that the coming app would offer “an expanded programming lineup” that will include “new talk, comedy and music channels,” it is unlikely that the total satellite lineup will be available via the internet feed. This is due to some content providers wanting to protect their own internet offerings. While Sirius XM’s internet content lineup is very strong, there will always be those that want everything.
Another concern pointed out by critics is that the coming iPhone/iPod Touch app will require internet access to work. While all iPhones have unlimited internet data service included in their monthly plan, the iPod Touch requires a WiFi connection to access the internet. Although AT&T (ATT) has extensive national data coverage, there are many rural areas that do not have full data coverage yet. While there are places where an internet signal is preferable, such as in an office building where there isn’t a terrestrial repeater nearby, there are places where the satellite signal is also preferable, such as when you’re traveling across country and you find yourself in the middle of the Mojave desert.
Enter Apple’s 3.0 Update
A few weeks ago, Apple presented the blueprint for its upcoming iPhone/iPod Touch OS 3.0 update and released the SDK to developers. There are over 1,000 new APIs (Application Programming Interfaces) offering amazing new capabilities. Digging deeper into this release offers many clues as to how Sirius XM may utilize this new technology. The possibilities are nothing short of game changing. While some features have been reported on, the big one has been overlooked — until now. The new APIs offer “support for applications to communicate with hardware accessories attached to iPhone or iPod Touch” and “apps can now communicate with accessories via the dock connector.” The dock connector “provides a standard electrical interface and the communication protocol for accessories to charge, control and interact with both iPhone and iPod.”
What this means is that every iPhone and iPod Touch out there can be turned into a full-fledged Sirius XM satellite radio with an inexpensive separately purchased car dock, home dock or portable accessory kit. Sirius XM’s full internet and satellite offerings — everything, everywhere. In addition, customers will be able to subscribe and upgrade their Sirius XM service simply with a few touches of their finger. This will bring Sirius XM to the masses. Do the math.
Position: Long SIRI
Position: Long. . very long. .. .this is the easiest money that will ever be made in this market.. .. ..double your money in a week. . . IMO
A big "if" is this: IF SIIRUS XM sees this potential in the 3.0 OS and takes advantage of it. IF they do, I’d quickly drop my regular XM radio in favor of an XM/iPod car/home dock.
>>can be turned into a full fledged Sirius XM satellite radio with an inexpensive separately purchased car dock, home dock or portable accessory kit.<<
Good in concept.. BUT. This is the wildcard without certainty of mass acceptance and puts the onus on the consumer to unlock the capabilities. Knowing this company, they will not lift a finger to call attention to this and will leave it up to joe/jane to figure it out for themselves. Which most won’t. I don’t think the company is capable of creating the proper buzz on this..nor effectuating it en masse. Not their style. sorry.
Enjoyed the article Demian but I somewhat question your last paragraph. Is this a guess on your part or fact regarding the ability of this docking station to recieve sat waves and turn the ipods into actual sat wave radios?
This could be very big if its true (or comes true). With the auto industry issues now and for the immediate future, Sirius needs something to fill its place and fast. The iPod app should help and if what you are saying is true could be very beneficial.
Sirius has never been on the cutting edge of technology… they had a great technology to start with, but they have since put their blinders on, and I don’t expect them to be on the forefront of the new API. Not now, never, no way…
lots of IF’s….sirius MAY release an Iphone application and MAY offer hardware….but i doubt it will happen at any opportune time…LIKE…on the day the new 3.0 is released….siri should piggy back and release iphone app same day and announce the hardware that you speak of….BUT….it’ll probably be months later that they release the iphone app….IF they ever even get around to it….AND hardware? forget about….
What SIRIUS XM needs to do is release an API for there radios. Why have they not done this? You would still need a subscription, but it makes it much harder and in some situations impossible to be able to write any programs without a SIRIUS XM API.
Maybe this was the reason the NICEMAC app was cancelled a couple months back…we can only look forward to more news regarding this scenario…..but there have been Apple rumors for several years….and none have been fruitful yet.
With the open access impossed by the fcc, Apple or anyone else could bring this divice to the market.
(likely better chance of that then Sirius doing something on thier own)
game changing????…….if a coach has a stellar play in his play book and NEVER uses it….then that stell play has no effect….game changing….???….i think not*
With all of the suggestions on this blog and others that has been going on within the last 8 months on how Sirius can think and act Creatively and Innovatively to improve Earnings, Revenue, Cut Costs and increase Stock Price, has the management of Sirius even consider for a Nano second to take a look at these FREE comments/suggestions (some of which are very interesting and have valid points) and seriouly consider, implementing and executing them to assist the company in moving forward on as many fronts as possible? In my observation, reading, speaking and engaging many people on this topic the end results seems unfortunately to be NO. The Management seems to have the brainpower of a Dead Worm.
My agenda was to enlighten every SIRI investor of the trading irregularities in this stock. The majority here are cheerleaders that will get burned in the end. ISEG is blatantly manipulating the stock every single trading day.
IMHO the I-Phone/I-Pod app will have the same affect as the on-line listening outlet with roughly the same charge and effect on bottom line,not game changing,hip cool and younger audience yes sure,it needs to be done now..
But it could also just transfer subs around like earlier poster said..The future is still OEM subs in the cars,old and new,along with Bussiness’s and homes with DTV…Phones used as old transistor radio’s and Walkman’s are only popular in Big urban areas where people can get a clear signal and walk around alot,plus as said before the present Battery technology is useless for listening to music long term..And why would you even bother docking it in your car when you have a free radio there already and same in your home with sound systems already rampant and available..
Great thoughts, Demian. Thanks for sharing them. All new iPhones should have the same 3-month free SIRI subscription that new cars come with. No reason not to do this.
Demian, thanks for your thoughts on this but, I still do not see the dollars falling to the bottom line… Try putting some numbers together instead of telling us "to do the math"… Sounds good but, more pumping than substance…. I, for instance, am only one of many of those 15M plus, self pay subscribers currently with 4 subs…. How does this impact existing subs? Decrease their numbers? What marketing plan to bring on new subs? iPhone Users are now going to pay for SXM ? Aren’t existing subscribers who already have internet feed going to get this free on the ipod or iPhone? Lot of questions without any answers yet…. I just don’t get the buzz on this adding to the bottom line much… OEM, as JonnyirishXM said above, is their bread and butter IMHO…..
Mel K. has to be aware of these new great cutting edge ways to get his companies product out to the masses. I can not believe for a moment that something isn’t in the works as we speak. If I’m wrong then Mel’s legacy is SO on the line. I can’t belive this could happen. What he has done in his career is amazing. If he is short sided or his ego gets in the way then wev’e got major problems. I’m hoping he has surrounded himself with tech savy people that he will utililize to help take this company to where it belongs. This company is still a diamond in the rough that is still somewhat hidden behind a pile of rocks. If he has surrounded himself w/ the right diamond cutters then a brilliant dynasty will evolve. If he has blinders on then not only will the investors be crushed, but the Sirius Xm fan base will lose also. Mel got the company thru the merger, which he is to be applauded, but know the question is "Can Mel Guide and Lead Sirius Xm Into The Mine Field of The Tech Savy Future"? So far he’s holding his cards close to his vest which keeps the rumor mill churing.
NEAL, I’m with you……………
FOR CRYING OUT LOUD………………………………….Everyone wants everything RIGHT NOW………..Everyone wants MEL & co. replaced for doing nothing……………………….
Someone tell me SOMETHING positive that has happen to this company over the past 2 years?????? And don’t say the merger approval, the 18 month wait killed that as being a near term possitive.
HOW are we even sill here????????
Start giving Mel some credit or you’ll be eating crow………Somehoe he’s gotten where we are now…..
The merger is ONLY 10 months old and we will be EBIDA positive next quarter and forever more from there…………the sub numbers do NOT matter………..after the full benefit of ALL the synergies, we’ll only need 14 million subs to make money,,,,SO why the hell should he be SPENDING a ton of money marketing IN THE WORST ECONOMY SINCE THE DEPRESSION, when all he has to do is cut costs and wait for the auto sales to return?????
NOT TO MENTION,,,,,,IMO,,,I beleive SOMETHING is and has been going on behind the scenes,,,,,,maybe not as wonderful as Damien has laid out, ( no offense, but I’ve had high hopes on every "exciting" thing on the way for years and been disappointed every time),,,,,but again,,,,WHY did Liberty lay out $540m?? They know….
PLUS,,,,,doesn’t everyone else notice that SIRI is unloading their retail radios??? They wouldn’t need them under Damien’s plan, not only for the IPHONE but for ALL smart phones???……Supposedly, the SIRI app is being released the same day as the new IPhone????? Explains the delay, the new technology wouldn’t have worked on the old iphone…………….
I’ve doubted Mel just as everyone else has……..Remember 6 months ago when everyone thought he was trying to steal the company from us and go private….Well the debt is settled now so that’s not an issue,,,,,now you want to out him because "he’s doing nothing"…………..
SOMETHING BIG is going on behind the scenes……………………………………………………………………………..
IMO,,,,,I say $2.00 sp within 18 months even if it IS with full dilution of 9 bil shares.
PATIENCE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!1
bleed on dat!
How many people might like to be hearing the 3hour eminem interview on shade 45 right now? Yes millions because he is the number 1 rapper right now…
SD-08, I LOVE CROW… I’ll take two large helpings of it if that means that Mel and Company are successful. I understand your frustration but, there is reason to be frustrated as a shareholder if you have been in this company pre merger… If you got in during the BK scare no problem, everything is fine… The thing is for the longer term holders there has not been a lot to cheer about IMHO…
I don’t want Mel replaced but, his reputation is now on the line… I am less risk adverse than most, so I have been trading this equity to regain my devalued investment since after the devastating merger effect and am still working hard to get there. I feel bad for the poor soles who dumped their positions during the BK scare… That was truly troubling.
You say the debt is settled now and is not an issue and I say it simply has been pushed out there for another day of reckoning… You wonder why Liberty would dump $540 M into the company and I say it was a great investment for him. He’s getting 15% plus fees for his risk and we gave up 40% of this Company to him… and had our common shares diluted in the process…
Like everyone else, you say that their is “something big” going on behind the scenes, and I say There Better Be……
test, test, test
@crfceo
test test
@crfceo
Testing to register….
Testing registration.
Interesting article. Hope this new application is just the boost SiriusXM needs to get back off the ground.
@cos1000
Is this the same cos100 from SA?
I’m getting conflicting opinions from you. Above you say that you don’t see dollars falling to the bottom line yet at SA you wrote this:
There will be a variety of ways that this relationship will generate revenue that goes almost directly to the bottom line.. Other than the split revenue agreement, whose details are yet to be known, advertising, & admin costs, the rest will drop to the bottom line. Some users will get the app and utilize their existing Internet Access, some will get the app and add internet access… These are existing subscribers. The rest will get the app., subscribe to the SXM content as a new sub or a add on multi sub with the internet access fee added in. In all cases the infrastructure is in place without a heavy capital investment… That’s been made already by Apple and SXM. Apple provides the platform, SXM provides the Content and Both recieve revenues to their bottom line…
Did I misinterpret something, or did you somewhere in the past couple days see the light regarding this new application?