By Brandon Matthews

Last night it hit me. I mean it just hit me! Like a voice from the Almighty himself, the thoughts in my mind began piecing themselves together. Suddenly, it all made sense. My only hope is that I can now translate this concept to paper.

To fully understand this concept requires an understanding of how the two separate Satellite Radio companies competed against each other for retail subscribers. Until recently, Satellite Radio enthusiasts looked forward with anticipation to new radio offerings that each company would introduce into the market, on a semi-frequent basis. I personally own three of them. A problem of significant proportions existed with those receivers however, in that the chip subsidies paid by Sirius and XM devoured any potential profits.

When Sirius Satellite Radio merged with XM Satellite Radio to become Sirius XM Radio (SIRI), I distinctly recall making a note that the word “satellite” had been conspicuously removed from the new company’s name. With yesterday’s news that some accessories are becoming hard to find, a new picture began to emerge.

I asked myself if it could be possible, that with the open access requirement made as a concession to the merger, if it might not make more sense for Sirius XM to completely abandon the retail channel, and leave the void for other companies to fill, such as Audiovox (VOXX). Imagine me, thinking THAT!

The newest portable offering, the Sirius XM Mirge will probably be the final radio that Sirius XM produces. The facts speak for themselves. A quick trip to Best Buy or Radio Shack proves that the shelves are running dry of new products. In the beginning, most cars were not equipped with Satellite Radio’s. That fact has changed. As more new cars are pre-equipped with Satellite Radio head units, the need for aftermarket units declines.

The new Apple (AAPL) iPhone and iPod applications which will be announced this quarter will render the Sirius and XM portables expendable, which may explain the fantastic deals the company is offering on them now. Within the next 10 years, the company will no doubt seek a single broadcast platform and any portable or stand alone radios in existence today will probably be replaced by new, high tech gadgets that Mr. Jobs and Co. have yet to introduce, with no chip subsidies required.

Old ways of thinking are preventing most of us from seeing the future. Mobile Internet is expected to grow to astronomical proportions. City’s are going entirely Wi-Fi. A satellite signal will still be required to reach remote areas and the nations fleet of automobiles and trucks, but the retail aspect is about to undergo a major change in my opinion. Sirius XM is reinventing itself right before our eyes. They just haven’t told anyone yet.

Position: Long SIRI

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