By Brandon Matthews
It’s made headlines around the globe. Sirius XM Radio’s (SIRI) new XM SkyDock has instantly become the “best of breed” before it has ever hit the market. I’ll admit, best of breed may be pushing it in a space where the newest offering is the only one of its kind, but I cannot recall an Apple (AAPL) iPhone or iPod accessory that has been this anticipated, and that anticipation is building for its October 19, 2009 release date. For consumers, the XM SkyDock is certainly an amazing piece of hardware, as it turns every one of the 40 million iPhone and iPod Touch devices (and growing) currently in use into full fledged Satellite Radios. This accessory dock provides a means to merge iTunes with live satellite radio, allowing iTunes users to discover, buy or listen to new music with a device already in the hands of millions of consumers.
Not much if anything has been mentioned about this Sirius XM and Apple partnership which allows Apple customers a way of obtaining live content on their iPod Touch’s and iPhones. I was disappointed that we did not hear more of this from the Apple media event that took place on September 9th. One of the main criticism’s of Apple Ipods has been their lack of live content. Sirius XM now fills that void. Likewise, Satellite Radio consumers will be flocking to Apple retailers to purchase new iPod Touch’s and iPhones to take advantage of this cross branding technology. With a price point of $119.00, it is certainly a fair price for a device with so much capability and promise. The only question remaining is not whether the market will embrace this new technology, but whether or not there will be enough units on store shelves this holiday shopping season to meet demand.
From an investment perspective, the XM SkyDock certainly offers SIRI investors a new twist in the form of a very nice profit margin. Initial rumors pegged the retail price at $99, a full $20 less than the eventual $119 suggested at the product unveiling. Experience teaches that this increase was most likely due to market research determining the best price that the most number of people would be willing to pay. Certainly there have been no complaints about the price point. Looking at the XM SkyDock, we can quickly determine that the profit margin must be very nice for Sirius XM Radio.
Let’s face it…it doesn’t come with an iPhone or iPod Touch. The head unit is the Apple device itself, and the wide array of programming functions that offer everything from Satellite Radio to sports scores to stock quotes comes from a free download app from the iTunes store that will be released with the SkyDock next month. The SkyDock does offer Sirius XM’s new “power-Connect” FM transmitter but so does the new Sirius Stratus 6 and XM Onyx which are offered for $69 and $79 respectively. These radios also come with a Satellite Radio chip, antenna, aux input jack, car dock and a full head unit with LED display and a microprocessor. That’s not to say its overpriced as the Sirius Sportster 5 will run you about $169, and offers a lot less in functionality now that the SkyDock has been unveiled. Clearly a rather tidy profit is built into the price of the SkyDock. Might there be a revenue share agreement with Apple? Might the same be true of iTunes purchases made through the device? No analyst has posed the question.
Investment benefits don’t end there, as the big push will no doubt be towards getting Apple users to subscribe to the top tier, XM with the “Best of Sirius” package which will allow consumers to get everything Satellite Radio has to offer from NFL and MLB to Howard Stern and Oprah. With 40 million Apple devices out there and growing, the profit margin on Sirius XM’s new offering may give the company an influx of increased revenue from a source other than subscription revenue and more importantly, profit.
Position: Long SIRI
http://news.chinatimes.com/2007Cti/2007Cti-Rtn/2007Cti-Rtn-Content/0,4526,110103+112009090900831,00.html
http://vechirka.kiev.ua/?p=39210
http://www.iphoneclub.nl/33876/sirius-xm-brengt-skydock-uit-satelliet-radio-ontvanger-en-carkit-ineen/
http://www.macplus.net/itrafik/depeche-48680-un-socle-pour-la-radio-par-satellite
siri/xm ++++++++ apple ====== merger 2013===============largest and most profitable technology company in world!!!!!!!!!
Clearly, the SkyDock is a significant link in the total marketing plan for a resurgent Sirius XM with global impact and major upside potential. All fundamental elements are now falling into place for this to unfold into the future. From a technical viewpoint, SIRI is now trading from dominant strength, projecting firm underlying support on pullbacks and further upside potential of significance over the next few years. This convergence of positive fundamentals and technicals indicates that current holders are likely to remain invested for the upside potential yet to come, and significant new investment should be anticipated from others as this story gains further understanding. Analyst recommendations are starting also to take note of this turnaround, with stealth upgrades (generally unreported in the conventional media) now being seen. All of this is very interesting, in terms of analyzing the ongoing large short interest in SIRI: Short positions as of 8/30 (reported last night) totalled 124.7 million shares – up by 5.1 million shares since 8/14. This suggests that legitimate investment demand is being met by firms still willing to short on the way up, continuing to fight the improvements for SIRI that are now taking place. Sooner or later, legitimate investment demand always wins out in these typse of situations, as shorts will eventually have to cover. Let’s hope the SEC is taking careful note of all this, and insisting that “fails to deliver” accompanying ongoing “naked shorting” will have to be cleaned up by forcing “buy ins”. It is clear from the character of recent trading patterns that manipulation of SIRI continues, by a combination of naked shorting and high speed computer trading, and it is hoped that the SEC will eventually return these markets to price discovery based upon legitimate investment decisions.
I am wondering how many docking devices will be competing for the iPhone/iPod going forward. This XM unit will become available close to the time that the Tom Tom GPS dock will be available. Eventually, iPhone/iPod users will have to start making some choices between GPS and XM and whatever other apps decide to create their own docks. Can we get some collaboration among docked app providers to make these dock a bit more modular to allow multiple uses? If profit margin is on the dock device itself, getting them to play nice might not be quickly forthcoming.
Good Lord. Other than subscription revenue??? What! This whole thing is designed to reignite the car aftermarket business! It’s to get subs for the car users who don’t have factory installed radios yet.
Out of the 240 million cars on the road, how many of them have factory installed radios thus far? It takes time!
They did mention FM Radio didn’t they ?
It has been mentioned by several people that Apple is not mentioning Sirius XM in its public statements. To me, that is not at all surprising. Apple has, and will have in the future, relationships with many providers, whether it is music, games, etc. If they started touting one company, others would say “how come you are not mentioning us.” Even smaller companies could say “Hey, we are doing business with you. Even though we are smaller than Sirius XM, we are doing business with you!. Why are you pushing them – it hurts us” I think Apple avoids all these bad feelings by not saying anything and protects its own interests.
I am surprised there is not a shred of information about this highly anticipated product on either the Sirius or XM websites. This article is the first to name a release date, October 19th. Others simply say sometime this fall.
I am still curious as to some of the functionality. For example, will the XM transmitter work with the Ipod/Iphone relaying stored tracks or just when Sirius/XM content is being played. Is there any place on the net where the full function of the unit could be researched? Why not create more buzz about the product by making the information available?
“Headlines around the globe…”? Right. “Sirius XM and Apple partnership…” Are you serious? This article is straight up HYPE as neither of those things exists.
i hope there is a major marketing push for the unit for the holidays–Then again, i was hoping for an NFL push too—oh well…
Brandon, you failed to mention the dock will also support iPhone’s .mp3s and other music apps including Pandora and Sirius streaming. It is a mobile mega media machine reaching aot more than just XM subs. People who don’t care for Sirius XM will still buy the device just to play their other music. I believe this is the killer feature that can push SkyDock sales well beyond projections..
@BeGeezus
the fm transmitter also works for stored music downloads….
Hype huh???
http://news.chinatimes.com/2007Cti/2007Cti-Rtn/2007Cti-Rtn-Content/0,4526,110103+112009090900831,00.html
http://vechirka.kiev.ua/?p=39210
http://www.iphoneclub.nl/33876/sirius-xm-brengt-skydock-uit-satelliet-radio-ontvanger-en-carkit-ineen/
http://www.macplus.net/itrafik/depeche-48680-un-socle-pour-la-radio-par-satellite
Great job, Brandon – Thanks for providing these links. Definitely not hype!!
Umm..why do did the link I click have an advertisement from SIRIUS XM on it? I have to agree your article was filled with “your” anticipation and hype. At this point NO ONE CARES ABOUT THIS SKY DOCK except people like us that read satelite radio blogs…I’m kind of confused, the whole world has the ability to access XM satelite? Doesnt this dock work off satelites that are only in U.S…why would China be excited about it? They are happy for americans? The device is overpriced…just like the Stilleto and XMP3 was…Not research , just greet..Hopefully they will drop price for holidays or give incentive such as 3 months free trial service or someting….
you miss the point that even someone in China with a iPod Touch or iPhone would still like a way to play their iTunes collection in a car, while charging the device..the new powerconnect technology makes this device better than any other, regardless of the satellite radio capability.
I WANT TO KNOW WHEN THE SIRIUS VERSION OF THE SKYDOCK WILL COME OUT. FROM WHAT I HAVE BEEN HEARING AND READING, IT SEEMS AS THOUGH THE NEW SIRIUS FM 5 SATELLITE IS MAKING FOR HUGE IMPROVEMENTS IN SATELLITE RADIO RECEPTION FOR SIRIUS RADIO DEVICES. THEREFORE, I THINK THAT I WANT A SIRIUS SKYDOCK, WHICH WILL ALSO SAVE ME SOME MONEY SINCE I PREFER SIRIUS PROGRAMMING OVER XM’S. ANYWAY, SOMEONE PLEASE FIND OUT WHEN THE SIRIUS SKYDOCK WILL COME OUT SOME I CAN BUY IT AND AN IPOD TOUCH. MAYBE IT WILL HAPPEN WHEN VERIZON HAS AN IPHONE, THEN I WILL BUY THE IPHONE WITH VERIZON AND A SIRIUS SKYDOCK…..ONE CAN DREAM AND HOPE!
@Brandon Matthews
I have to disagree, I just have a hard time believing that anyone would pay $119.00 just to hook their iphone or ipod touch to their car and charge it. The same thing can be done for under $20.00. As far as best in class, without satelite capability, I saw a car dock that charges the iphone/ipod touch, has fm transmitter, and speaker phone for calls for about $85.00 in costco. I believe it was made by Belkin. But a simple car charger and audio jack or fm transmitter could be bougth for about 1/4 the price of this skydock. Think about it…Ipod touch 8gb was just cut to $199.00 by APPLE….do you really think people will spend more than half the price of the device for a car dock to listen to their playlist? this device is only for those that can get the satelite signal in the U.S..Internationally it will have no appeal. It’s like selling an XMP3 in china and saying…they can lisen t mp3′s on it….there are much better alternatives for that use..to lsten to your ipod playlist in your car in china or internationaly…there are much more practical alternatives…Don’t get me wrong, i am long SIRIUS XM, i love the product and want the best….but we have to be realistic….This is now more international than any other “satelite” car device.
@B FREE
There won’t be a SIRIUS skydock made. There is no reason for them to do that. The XM side allows for all programming…baseball, howard stern, etc…I realize a Sirius skydock would save Football, and Howard Stern fans money…Don’t you think that SIRIUS XM realize that….If you really want football and Howard stern…you will buy best of SIRIUS, they offer “specials” every once in a while. The last one was best of sirius for about $2.00 a month…The company is focusing on increasing revenue from customers right now, not making it the cheapest possible. If they wanted to save you money, they would make the skydock A LA CARTE capable…Im sure that was possible….The best of Sirius has been very profitable…the best of XM has been dissapointing…they will make the device where people will want their “best of” package..As far as I have read…XM has more satelites also…I could be wrong on that…Brandon would know better. If money is issue….just get a SIRIUS dock and play for about 20% of what you will pay for a ipod touch and skydock…just my opinion. I’ll take my XMP3 over a ipod touch and sky dock any day…..if I had an ipod touch…I would get the sky dock though, I wouldnt want a bunch of devices….
@JERROLD WILLIAMS
typo from …above last sentence…lol…these netbooks make me do some typos…
This is NO more international than any other “satelite” car device.
VA:F [1.6.3_896]
@Brandon Matthews
check this link of Iphone and ipod touch users….here is the great “anticipation” for this skydock…..I’m telling you, people aren’t excited about paying $119.00 for a dock and then paying $15.00 and up for monthly service…..added to their 40 dollar data plan and text for iphone users…Ipod touch users will like…but the cost will be an obstacle…unless it is on sale for holidays…. read the posts on a apple forum…
http://forums.macrumors.com/showthread.php?t=773044
“The only question remaining is not whether the market will embrace this new technology, but whether or not there will be enough units on store shelves this holiday shopping season to meet demand.”
This part of your article is the “hype” part….read apple forums as the one above….apple users don’t flock to buy expensive apps or accessories, unless they have the apple logo…..Ipod/iphone users have to be sold on the idea of paying for audio content…I don’t care how “cool” you think this dock is….It charges the ipod and has a sophisticated sounding fm modulator. People will only pay for great content…the device is secondary…add to that it is more expensive than a dedicated SIRIUS or XM radio and this will be a tough sale for NON SATELITE JUNKIES…like us…
This “power connect” technology” just sounds like SIRIUS XM new FM modulator that hopefully won’t get them sued like a few years ago for inteferring with other cars radios. They then had to start using that direct connect due to the FCC forcing them to. Years ago, I had a XM that didnt need to be hardwired to radio. Other modulators are available that do the same thing as the sky dock can, for a couple of bucks….The dock is not that amazing, except it allows iphone users to use their iphone or ipod touch to get satelite radio….CONTENT and convenience is the only selling point for the dock for those that love APPLE products..Is it worth $119.00 upfront…then another $150.00 a year? There will be no flocking without a great Marketing push!!! even then we are only hoping for good results…this is a tough sell at that price! BY 2010, this will be half the price….mark it down….clearance to attract subs!!that will be smart and needed move…this should be at best $80.00 device….unless they add free months of service…
@JERROLD WILLIAMS
Wrong. Apple device users have wanted live content. Sirius XM is now that live content….the only source of live content. Even CNBC is now available on the Internet version….meaning the iPod or iPhone can actually play cnbc through the dock…..
Content IS king….and now the ONLY way apple customers can get that content is with the skydock
Jerrold, never question the all-knowing, Brandon. His word is final.
Tell me more about this “partnership” that Sirius has with Apple please, Brandon. Is it any different that the million other “partnerships” that every application developer has?
You need to quit linking Apple and Sirius like they’re partners…it’s unnecessary hype. But, I suspect you will, and I’ll get your typical response: “Wrong.”
@Brad
No Brad….you get a …. wrong schmuck!
http://www.satwaves.com/forum/viewtopic.php?f=64&t=1246&p=53441#p53441
I’m not sure what you are saying is wrong. The link I posted are comments about the skydock from a sample of Apple customers. The question isnt If Apple customers want live content…it is weather they are willing to pay $119.00 for sky dock and then 15.00 – $20.00 a month. Of course Apple customers want live content, that is why Pandora get so many downloads. Apple customers have always Known about SIRIUS XM, but many feel it is too expensive when they have other free alternatives. I realize Pandora is only music and SIRIUS XM offers a lot more. But, do Apple customers see the value? If they did..why havent they hooked up SIRIUS XM in their car up to this point with a less expensive with more features dock and play? The $119.00 skydock is an expensive entry point into SIRIUS XM…..To say I’m wrong for pointing out that this Sky dock is not in as much in demand as you say is very arrogant on your part. I don’t even believe Mel Karmazin thinks this device is just gonna get sold off the shelves…Either he will put major marketing behind it..or just expect marginal returns…..Your premise that Apple customers want live content so they will buy it…is the same as…Commuters want commercial free music, plenty of variety of news, comedy etc…SIRIUS XM is the only way to get it so….everyone will want it….Well do they want to spend money on it? There is a way of thinking that radio should be free…not over $15.00 a month…until that hurdle is broken for the masses….it will be a tough sell to new customers..especially apple customer who download a lot of free stuff…
I know I will get a negative checks for saying this but…NO ONE IS ANTICIPATING THE RELEASE OF THE SKYDOCK…..Only you and other satelite radio junkies…myself included…..You have your dedicated website to satlelite radio..and think that most people are as interested in satelite radio content and devices as you are….Go ahead and read the posts by Apple customers onthe the link I sent…go google or bing links on what apple users say about SIRUS XM at this time. Then go international and tell an iphone/ipd touch user that he can now buy an accessory to charge his device and has a buile it FM transmitter for $119.00…..They may send you back to your country!!I’m not a basher…but this article was pure hype….I am an invester…but this device will not lead to big profits…im sorry….As Mel K said…We never expected to get a lot of new customers with the app….Same here….
Go ahead…give me negative checks for being honest…..Give everyone that says this is the best thing for Apple since Steve Jobs a positive check, Just what Apple customer needed a $119.00 car dock, this is what all 40 million have been waiting for before they get SIRIUS XM, They will line outside the door the night before, etc….As Chuck D once said…Dont believe the hype! your credability has been lost with saying “headlines around the world, assuming that their price is right due to market research, etc…The same great market research was done for the XMP3 that sits on Best buy shelves in the back, the same market research that made the Mirge such a roaring success..Apple customers are giggling at SIRIUS XM’S flaw in the outragous price for this…read their posts…bing or google others….
Long SIRI, but not delusional….
honest? pandora is a music jukebox….there is zero live content…as for the skydock demand….try to buy one this x-mas..I can guarantee you this…if you do not see what is right in front of you, then you do not own an iPhone or iPod Touch…If you did, you would not be making the statements that you are….40 million of these devices are out there…you’ll be lucky to see 1 million skydocks by christmas…..you do the math.
As for your claim of apple users not getting excited about satellite radio previously…the point you miss here is that they they already own the radio head now….the live content they have been missing is now available. They do not need to buy a second device. This compliments the device they already own.
I posted links to news articles in french, chinese and russian….do youi not yet understand that the dock is not even on the market yet and is receiving this kind of press. Does the reality that they are talking about it on Apple discussion forums elude you somehow? They certainly never talked about the stiletto or xmp3….why? Because it had nothing to do with apple…
This makes the apple product better…bottom line and that’s what is creating the hype…I have seen it….felt it….touched it….played with it…when you see this unit proudly displayed in the front of best buy, radio shack and the apple store, you will understand that apple users will be buying these docks in droves…
lol…ok…I got a negative you got a positive…you win….so according to you….You are expecting a possible 1 million new subs by christmas…Ok…i;ll be easy 800,000 new ipod touch/iphone users due to this skydock? Great, so SIRIUS XM should have over 19 million subscribers by the end of they year or end of 1st quarter…these skydock will be hottest thing in apple store, best buy, etc…..Ok, I hope so…I have a lot of money invested! I will copy this post, if these arent selling like you say this holiday season…or it is being bashed on the itunes forum….Your credibility s shot!!! We will see….No use to debate anymore…you are strong in your opinion…You have seen it…i havent….I just look at the economics of it. If this sells out like you say…The stock should be about $1.50 by the end of the year…We will see….I don’t own an ipod touch or iphone, i own an xmp3…Those that I know with ipod touch were not excited about pay radio….I read the mac forum of ipod users and didnt sense overall excitement…i heard price concerns, stability concerns, etc…we will see shortly…Question, does SIRIUS XM advertise on your site…or do you have no connection?
No connection at all….although as an investor, you could say that I do own a part of the company…
Sirius XM does not advertise here and I have no affiliation….FWIW, I have written many scathing articles about them in the past…in fact the NFL article I wrote was a play on last year when I wrote that they had dropped the ball on the NFL non marketing..
In March I warned people about the concept of a going concern being a debt issue that could have caused a default…..dont paint me as a pumper…when I see something, I write about it…period…
following the first quarter, I was the first to write that sirius would be on track to lose 1.6 million subs this year if auto sales remained at those first quarter levels…I was crucified for that call, which was spot on…they lost 400k in that quarter
I just happen to be bullish right now, and as it turns out, I have been right more times than not
Still waiting to hear about how Apple and Sirius are in a partnership, Brandon? Parnerships require both sides signing a strategic agreement to create a mutually beneficial relationship, not one company creating products to capitalize on another company’s product.
Don’t be so damn defensive and take a bit of legitimate criticism. This article is hype.
,,
Great debate guys,
As a reader, investor, customer, I was glued to this conversation. You guys brought forth just as many questions to think about as you did answer. I hope it continues.
One thing Jerrold, I wouldn’t look at the skydock sales as a direct link to “New subs”, I’m sure many of those sales will be to existing Sirius customers, and in Brandon’s defense, he never said they would.
If the FM transmits in stereo I’ll buy several units. If not it would be useless for me.