By Brandon Matthews
The XM SkyDock has begun to receive the accolades that I have been reporting would come. Rave reviews of the revolutionary new satellite radio offering are beginning to pour in, as more and more Apple (AAPL) iPhone and iPod Touch owners are coming to the realization that yes……There’s an app for that!
Out of the box, and with a basic XM monthly subscription the SkyDock brings iPhone and iPod Touch owners everything XM offers including CNBC, Major League Baseball, Oprah Winfrey, Opie and Anthony, Mad Dog Radio and all the rest of the exclusive XM lineup including its extensive commercial free music offerings to Apple Devices. Adding the “Best of Sirius” package will add the NFL, Martha Stewart, Howard Stern and lots more! A new marketing campaign dubbed Rock ‘N’ Rewards offers a cash reward for new subscribers of up to $100.00 which will actually pay for the upgrade, although the cash reward can be used for any purpose.
From a consumer standpoint, this is big news. From an investment standpoint, it’s even bigger. It has been no secret that Sirius XM Radio (SIRI) relied heavily on new car sales for far too long. Looking at the numbers that Apple reported just two days ago, it is clear that this new market represents a growth opportunity that dwarfs both the new and preowned auto markets.
Consider that out of 10 million new cars sold annually, approximately half of them are not equipped with Satellite Radio, and the “take rate” of those that are equipped stands at less than 50%. As 100% penetration comes at a snail’s pace through all the major auto manufacturers, subscriber growth will keep a similar pace.
Every new car radio carries with it a cost to Sirius XM whether or not the service is ever subscribed to. There are also issues of revenue share agreements with the automakers that cut into Sirius XM’s earnings and profit potential. All in all, new car sales have created growth and awareness of satellite radio, but that growth as 2009 has demonstrated, has slowed as auto sales declined sharply.
According to Apple’s press release, the company sold 10.2 million iPods and 7.4 million iPhones in Q3. No number was given regarding iPod Touch devices, but the picture is clear. The company during its press conference also admitted to pent up demand heading into Q4 for the iPhone, due to supply problems that Apple has just recently begun to overcome.
With nearly 30 million iPhones alone being sold annually, the new car sales annual rate of 9-10 million vehicles can potentially be rendered a second tier market for Sirius XM Radio. This quarter may prove to be a historic quarter for Sirius XM Radio, if it can capitalize on this new market of Apple consumers. It may just be as simple as letting Apple consumers know that — “Yes…There’s an app for that!”
Position: Long SIRI
Yep it’s a great news for the investors. Go SIRI!!
Maybe I am missing something here, but is this a slap in the face to Sirius subscribers?
From XM Skydock FAQs:
Is there a SIRIUS version of the XM SkyDock planned?
There is no plan to introduce a SIRIUS version of XM SkyDock.
So, am I to take from this that XM subscribers can get Stern on their mobile devices, but Sirius subscribers cannot? Or, does this app merely turn your iTouch into an XM receiver?
Did not even know Skydock was out yet.
Good Work, Brandon. I think this skydoc gone be skyrocket. Hehe
all aboard wall street fans!!!
so now we await the HUGE marketing campaign for this and other new receivers….and await….await…..wait
Good article Brandon! No doubt the Skydoc can be HUGE for SIRIUS in the long run. My only concern is what does this do to auto activations in the short run? Already at less then 50%. Looks like the skydock may drive that percentage lower? Any concerns about this in the short run? Certainly the way to go long term from both a targeted population and cost savings basis!
Why has the Skydock not appear in Apple’s revamped Apple store? Maybe until it does Sirius is waiting to release any PR without it first being in stock. Still you have to wonder why its not already there. Radio Shack has it and plenty others.
Brandon,
I’m a Sirius user now for 3 + years and love the product. As a long term frustrated yet patient investor I’m pleased the Skydock is finally out. I’ve owned Sirius stock for several years and will continue to dollar cost average with stock prices in the 60’s. Can you tell me why the Skydock is not yet out at Apple stores across the country………this is where the major foot trafic with deep pockets are.
Is there a way to power the skydock outside of the car? I think the product would be more attractive if you’re able to use it for more than your 20-minute daily commute. I’d like to listen at work and be able to plug in at my desk. Is there an FCC stipulation against such a thing?
Hi Brandon,
Why do the merged companies Sirius/XM stay seperate? Products like Skydock only get XM content and not Sirius for same price? Why not re-brand under one name and offer all the content of both stations and quit making consumers pay for XM and Sirius seperately? We are all aware that they have merged into one company. The current sales and marketing strategy seems to undermine S/XM’s image of caring about their consumer. It would seem they only care about gouging their consumer for every dime they can take thru extra subscriptions etc. Why would someone who has a Sirius or XM account have to pay for anything else than the Skydock hardware to utilize their iPhone? I hear you have to get a second subscription…ludicrous. Today’s consumer rightly or wrongly expects their apps and subscriptions to be seamless in their execution. They have satellites and they have content that can be beamed down…beam it all down for a set price…that’s what today’s consumer wants. The more people who use it, the more it will become a necessity(a standard) in life. They are kinda shooting themselves in the foot with their different basket of choices and hardware that is a pain to figure out for the simple consumer. I always think about HBO when it came out and how people had to get used to paying for TV. I think S/XM is the same thing and they should start out simple and then create “best of” and “mega sports” packages down the road. Any insights?
@Jeff Boos
Jeff Boos….I totally agree.
- Take a look at “Update 1: Audiovox Offers Exclusive Sirius XM Information” …”The news did not stop there, as Mr. Caltabiano confirmed that the company was working on new accessories to compliment the Xm SkyDock that will be unveiled at the Consumer Electronics Show (CES) in January, opening the possibilities of home docks and portable radio accessories to be introduced.”
The possibilities with this company are endless…
Long SIRI
Anyone who does not recognize the Skydock potential as a real “game changer” for Sirius XM is seriously missing the boat, in my opinion. The universe of potential subscribers has now expanded exponentially by enabling Sirius XM to penetrate the market served by iPhone and iPod Touch users. Also – it appears more is to come, in terms of related product development to tap into the wireless and internet markets. There are a lot of people still looking in “the rear view mirror” with this company and they are really missing the big picture of opportunity.
This is exciting, reallybig, this is huge. As Brandon says, “This is a real game changer”. Well if you’re not convinced just look at what it has done to the stock price. But then I guess we’re waiting for the launch, I mean ramp up with launch of the marketing campaign. This according to the other lug nut, Tyler Savage. Did these 2 numb nuts break out of Belleview or what. I think they are both smoking crack.
THEY NEED TO INTRODUCE AND EDUCATE CONSUMERS TO THIS PRODUCT!!! I AM A SUBSCRIBER AND INVESTOR WHO STAYS SOMEWHAT IN TOUCH W COMPANY HAPPENINGS AND STILL DON’T KNOW A LOT ABOUT THIS PRODUCT!!! FOR INSTANCE HOW DOES IT CONNECT TO CAR SPEAKERS!!!!! THIS IS A LACK OF MARKETING AND THE COMPANY HAS TO DROWN THE MARKET W INFO NOW!!! NO?
How is that iPhone app working for you?
Go home, suzan – your cover is blown. Add your name to the other SIRI-Doom pseudo lookalikes.
@Jeff Boos
I have been thinking the same thing. If I place the cigarette lighter into a coverter, can I plug it into an AC outlet? Anyone who has already picked up the SkyDock have you tried this.
According to our exclusive audiovox interview last week, new home and portable options are going to be unveiled at the CES in January
When is the next Satwaves Radio Show? Last weeks was a great show!
tonight at 9…but this one’s going to be boring
Is there a link?????
Anyone know how it connecets to car audio system?
WHEN DOES THE MARKETING CAMPAIGN START!!!!!!!!!!!!!! That is the #1 question that BM needs to find out for his followers…….Thanks so much for your work.
There’s really is a lot of wishful thinking going on. The Sirius internet app was no game changer although it was expected to be. The same will be said of the Sky Dock. The issue is quality, and that is where Sirius fails. With all of the combined or canceled stations one would think that bandwidth would have opened up for better audio quality. Obviously that is not the case. I am no audiophile, but it’s clear to anyone the sound is less than ideal. Sure the programming is good but when the day is done a company that specializes in music should offer up superb quality. Same for the internet, be it the wma streaming files from the Sirius site or StarPlayr, or the lousy audio of the 128k mp3’s on the iPhone, quality is lacking. Popping, cracking, timeouts, buggy software, etc… When the day is done, no matter how they market it, if quality is lacking no one is going to be interested.
Wow!!This is huge!!!!Best device since the Microwave!!! Give me some thumbs up for that overexcited nonsense…Now..reality check…
1)This statement is absurd!!!
“With nearly 30 million iPhones alone being sold annually, the new car sales annual rate of 9-10 million vehicles can potentially be rendered a second tier market for Sirius XM Radio.”
Let me break this down for the over excited. The reason satelite radios main subscribers come from new cars is not because it is available in 9- 10 million new cars a year . Satelite radio is available to anyone with or without a car, you can get it on your bike or roller blades if you want (portable units). It has gained millions of subscribers because it was given to them for Free and then it came with a 3-6 month FREE trial!!! Those people then became “hooked” If someone buying a new car was given the option of paying $119.00 for satelite and then pay $15.00 a month…the take rate would be less than 1% compared to 50%. So, Apple can sell 500 million iphones, ipod touch devices…you cant compare to new vehicles because they are being asked to spend $119.00 and then pay up front for what to them will be a “new” service. Do people realize that this SkyDock is one of the most expensive Dock and play radios? The SKYDOCK is a good device, a compliemt to XM’S line of retail Dock and Play radios….But, it making the new car market secondary? WHAT!!?
Free + 3 months of service is a better deal than $119.00 + $15.00 a month…That is the hook of satelite radio…not a $119.00 docking device!!I’m starting to think that some people are becoming part of a SKYDOCK” cult and worship this thing…geez..give me a break already!!……….Nice product…But this won’t make or break SIRIUSXM…I say it 10 million times…Its all about CONTENT!!!!and building the demand for the content!!!new cars do that by offering people the service for free for a limited time..they love it and then are willing to pay for it…a $119.00 dock with no promotion of content or free trial, will not drive many new subscribers!!!!!!!! If one more person sites APPLES numbers as a sign of SIRIUS XM’s future success..!!!!Apple numbers help Pandora, Slacker, facebook, free services…More than it helps SIRIUS XM!!!!!!!
xm sound quality in my sky dock is superb maybe people should get one before bashing i mean complaining.SES
The next point are for those talking about a home dock for the ipod touch/iphone. I don’t think this will happen for several critical reasons.
1) The SKYDOCK is the XM RADIO, not the iphone/ipod…So, if they made a dock for the home, it would then require another subscription as the ipod/iphone is merely a controller for the dock. A dock in the car $15.00…a dock in the house another $15.00….No DEAL!
2) For inside the home or office a dock is not needed. The free app allows you to use Wi-fi or 3g if you have an iphone. For the Howard Stern fans…they can use their computers to stream Howard Stern at home with their computer….No need for dock for ipod/iphone in home/office. If you want live sports in the home on your ipod..no go….turn on your tv!!
Ok….That’s the reality check….Now back to how all these ipod touch/iphone users were waiting for this product…..lol…SRS had tons of pre-orders…..Yet…I go to my 3 local Best Buy stores and these things arent moving off there bottom pegs…….People in China and Switzerland have waited for this…Headlines around the world for the SKYDOCK!…Let the dreams continue….
LONG SIRI…but refuse to join the delusional sirius xm cult!!
I agree Mike, some people should actually own the Skydock first before they start bashing it! I have had the Skydock since October 11th and I am very happy with the purchase! I can listen to Sat. Radio or switch over to the I-Pod on my I-Phone using one device and that is the Skydock! I have no problem with the sound quality and think it is good! Yes Apple will be helpfull to us since they are going to be selling the Skydock in their Apple Stores!
@mike
I’m sure the sound is good, no one questions that. I don’t have an ipod/iphone, I just bought a XMP3 off Oprahs website for $100.00 with vehicle kit for a family member. I can jog outside and I get Full sateliteXM, you cant do it with SkYDOCK, With SKYDOCK, you can tag a song to purchase from Itunes!!! I press record on XMP3, and I have the song. I can schedule recordings any time of the day…record up to 5 channels at once…skydock cant record anything, Skydock cant even pause!!!Ipod NANO CAN PAUSE FM!!!I can go on…SKYDOCK is pretty, but functionally less than amazing….yet it is a good compliment to XM’s line of dock and play for that small niche market of people that are willing to pay premium prices for visually pretty, yet inferior devices for their apple products.
WTF? oK…enough bad talk about SKYDOCK…check AMAZON.COM….its on sale for $92.73….Thank you!!!My sentiment exactly!!!Sell this for the lowest price possible! Get this off the shelves!!!…..Already a $25.00 discount…..We need subscribers!!!Not profit on this dock!!My comments get a lot of “thumbs down” I am long SIRI, but like to stick to reality…This skydock is good….it just was overpriced….price is coming down already!!!!Like I said it would…This site said at $119.00 they would have a hard time keeping it in stock….who was right? who was wrong? well…..It’s not my site so I must be wrong?….but facts are facts…..Price cut already! Those that believed the hype and bought it for $119.00…..good job..you got ripped.congrats to SRS for all those pre-orders at $119, do they get to return and get cheaper price within 30 days?, …I told everyone they would have to drop the price or throw in free months….1st step is price drop….combine this with rock n rewards and this is becoming a good deal….still more to go….Look for promotion of free months by christmas! We need the same “new car” model. Offer device at cost or loss, give the thing away if needed…..People love the content once they try it….then they become long term subscribers! like me. All the talk about profit off this device was once again irrational exuberance….facts are facts….SIRI will make profit off subscribers not devices! Reviews for this are great…people love it…bad thing is, not many reviews due to not many early buyers….drop the price and this will take off!…..With a 2 year subscription to XM everything, you get $75.00 back…pretty much making the device about $17.00 bottom line! now they need to promote!
Ya, it’s still the quality. Sirius streams their lousy .PAC proprietary codec that carries no dynamic range. Doesn’t matter if it’s a Sky Dock, your home antenna, or in your car. Thus you don’t need to own a Sky Dock to comment on the quality.
The real game changer will happen when Sirius provides a more respectable audio experience which given an iota of effort could be accomplished.
Come on, who wants to hear static and intense compression in digital audio?
I have Sirius in my car, my wife’s car, home, and 2 internet subscriptions for my wife and I. I love it, but it needs to be seriously improved before the average consumer will shell out 13 bucks a month for great content, but poor quality.
J-
Old man Gillette said it all in the early 1900’s with his statement; “If there’s money in razor blades then give them the razor!” The same has been applied successfully to cell phones and should now be applied to satellitte receivers. If they can’t do it 100% free with a two year subscription then make it near free. The bottom line is to introduce people to satrad and they’ll be hooked for life. It’s that simple!