iPod poised to kill already unprofitable satelite radio?
08-06-06, 11:59 AM
#1
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iPod poised to kill already unprofitable satelite radio?
Automakers Embrace iPod; Satellite Radio Dead?
Apple's iPod integration deal with GM, Ford, and Mazda is just the tip of the bad news for struggling satellite radio providers. By 2007, more than 70% of U.S. auto manufacturers are expected to offer similar iPod services.
By Mark LaPedus, EE Times
Aug. 3, 2006
URL: http://www.informationweek.com/story...leID=191800268
SAN JOSE, Calif. — In what could send some ominous signals for satellite radio providers, Apple Computer Inc. Thursday (August 3) teamed up with Ford Motor, General Motors and Mazda to deliver "seamless iPod integration" across the majority of their respective car brands and models.
The three auto makers claimed that they will make it easier for users to integrate their iPods into a car stereo system. Seamless iPod integration allows drivers to use their car's multifunction controls to select their music, according to Apple (Cupertino, Calif.).
Ford, GM and Mazda insist that they are not backing away from a somewhat rival technology: satellite radio. But major providers of satellite radio — Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. — are expected to greet Apple's news coolly, especially as the two radio startups continue to struggle and lose money.
But by 2007, in fact, more than 70 percent of all U.S.-based car makers will offer iPod integration. Ford and General Motors will feature iPod integration in the majority of their 2007 models in the U.S. beginning later this year, while Mazda's entire global 2007 lineup of cars and SUVs will offer iPod connectivity.
General Motors (Detroit) said that it has developed an "affordable, all-new iPod adaptor, allowing music lovers to use their iPod with the factory-installed audio system in GM vehicles, beginning this fall."
The device, called "Personal Audio Link," will sell at GM dealerships for less than $160, plus installation. It will be introduced in October on 2006 and 2007 model year Chevrolet HHRs, with more GM vehicles scheduled to be added by the end of this year. Designed specifically for the iPod, GM expects to make the device available on all of its 56 vehicle models, mostly by the end of 2007, said Nancy Philippart, executive director of GM Accessories.
"With our simple, affordable system, our customers can plug their iPod into their vehicle audio system and get what they want — clear, quality sound as well as access to playlists and artists' names," said Philippart in a statement.
Rival Ford (Dearborn, Mich.) said that it is responding to the skyrocketing customer demand to bring electronic devices into cars and trucks by offering the new iPod features to its lineup.
For the 2007-model year, built-in auxiliary, audio-input jacks will be offered on the Ford Edge, Explorer, Expedition, Mustang, Fusion, Sport Trac, Ranger, F-150, Mercury Milan, Mountaineer, Lincoln MKX, Lincoln MKZ, Navigator and Lincoln Mark LT. The jacks allow customers to bring any iPod or other MP3 player with a standard 3.5 millimeter audio output into their vehicle and play it through the audio system.
In addition, early next year, Ford and Lincoln Mercury dealers throughout the U.S. will begin offering Ford's TripTunes Advanced audio system — an iPod integration feature that provides drivers with top sound quality and recharging at the same time. TripTunes Advanced allows the driver to store the iPod in the vehicle's glove box and select music using the steering wheel or radio controls.
The U.S. auto makers claim they are not dropping satellite radio. Responding to another consumer trend, Ford said it is increasing the number of its vehicles with DVD-based navigation systems and Sirius satellite radio. By the 2008-model year, Ford expects to offer available Sirus satellite radio in 90 percent of Ford, Lincoln and Mercury vehicles.
Still, Apple's partnerships with Ford, GM and Mazda is a blow for satellite radio providers, which are struggling to make money. For the second quarter of 2006, XM (Washington, D.C.) last week recorded gross subscriber additions of 926,281 and net subscriber additions of 398,012. XM finished the second quarter 2006 with a total of 6,899,871 subscribers, representing a 56 percent increase over the 4,417,490 subscribers at the end of the second quarter 2005.
For the second quarter, XM reported revenue of approximately $228 million, an increase of 82 percent from the $125 million reported in the second quarter 2005. XM's net loss for the second quarter of 2006 was $229 million, compared to a net loss of $147 million during the second quarter of 2005.
The net loss for the second quarter of 2006 includes $105 million in de-leveraging and other non-operating charges that were not incurred during the second quarter of 2005.
XM still expects to achieve positive cash flow from operations for the fourth quarter 2006 and the full year 2007, although its ability to do so becomes challenging toward the lower end of the subscriber range.
Recently, rival Sirius Satellite Radio (New York) said it ended the second quarter with 4,678,207 subscribers, 158 percent higher than second quarter 2005 ending subscribers of 1,814,626. During the second quarter of 2006, Sirius added 600,460 net subscribers, a 64 percent increase over second quarter 2005 net subscriber additions of 365,931.
Total revenue for the second quarter of 2006 increased to a record $150.1 million, nearly triple last year's second quarter total revenue of $52.2 million. Sirius reported a net loss of $237.8 million, or minus $0.17 per share, for the second quarter of 2006.
For the year, total revenue is expected to hit $615 million, up from previous guidance of over $600 million. Adjusted loss from operations is expected to be $565 million, in line with previous guidance
Copyright © 2005 CMP Media LLC
http://www.informationweek.com/share...leID=191800268
Apple's iPod integration deal with GM, Ford, and Mazda is just the tip of the bad news for struggling satellite radio providers. By 2007, more than 70% of U.S. auto manufacturers are expected to offer similar iPod services.
By Mark LaPedus, EE Times
Aug. 3, 2006
URL: http://www.informationweek.com/story...leID=191800268
SAN JOSE, Calif. — In what could send some ominous signals for satellite radio providers, Apple Computer Inc. Thursday (August 3) teamed up with Ford Motor, General Motors and Mazda to deliver "seamless iPod integration" across the majority of their respective car brands and models.
The three auto makers claimed that they will make it easier for users to integrate their iPods into a car stereo system. Seamless iPod integration allows drivers to use their car's multifunction controls to select their music, according to Apple (Cupertino, Calif.).
Ford, GM and Mazda insist that they are not backing away from a somewhat rival technology: satellite radio. But major providers of satellite radio — Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. — are expected to greet Apple's news coolly, especially as the two radio startups continue to struggle and lose money.
But by 2007, in fact, more than 70 percent of all U.S.-based car makers will offer iPod integration. Ford and General Motors will feature iPod integration in the majority of their 2007 models in the U.S. beginning later this year, while Mazda's entire global 2007 lineup of cars and SUVs will offer iPod connectivity.
General Motors (Detroit) said that it has developed an "affordable, all-new iPod adaptor, allowing music lovers to use their iPod with the factory-installed audio system in GM vehicles, beginning this fall."
The device, called "Personal Audio Link," will sell at GM dealerships for less than $160, plus installation. It will be introduced in October on 2006 and 2007 model year Chevrolet HHRs, with more GM vehicles scheduled to be added by the end of this year. Designed specifically for the iPod, GM expects to make the device available on all of its 56 vehicle models, mostly by the end of 2007, said Nancy Philippart, executive director of GM Accessories.
"With our simple, affordable system, our customers can plug their iPod into their vehicle audio system and get what they want — clear, quality sound as well as access to playlists and artists' names," said Philippart in a statement.
Rival Ford (Dearborn, Mich.) said that it is responding to the skyrocketing customer demand to bring electronic devices into cars and trucks by offering the new iPod features to its lineup.
For the 2007-model year, built-in auxiliary, audio-input jacks will be offered on the Ford Edge, Explorer, Expedition, Mustang, Fusion, Sport Trac, Ranger, F-150, Mercury Milan, Mountaineer, Lincoln MKX, Lincoln MKZ, Navigator and Lincoln Mark LT. The jacks allow customers to bring any iPod or other MP3 player with a standard 3.5 millimeter audio output into their vehicle and play it through the audio system.
In addition, early next year, Ford and Lincoln Mercury dealers throughout the U.S. will begin offering Ford's TripTunes Advanced audio system — an iPod integration feature that provides drivers with top sound quality and recharging at the same time. TripTunes Advanced allows the driver to store the iPod in the vehicle's glove box and select music using the steering wheel or radio controls.
The U.S. auto makers claim they are not dropping satellite radio. Responding to another consumer trend, Ford said it is increasing the number of its vehicles with DVD-based navigation systems and Sirius satellite radio. By the 2008-model year, Ford expects to offer available Sirus satellite radio in 90 percent of Ford, Lincoln and Mercury vehicles.
Still, Apple's partnerships with Ford, GM and Mazda is a blow for satellite radio providers, which are struggling to make money. For the second quarter of 2006, XM (Washington, D.C.) last week recorded gross subscriber additions of 926,281 and net subscriber additions of 398,012. XM finished the second quarter 2006 with a total of 6,899,871 subscribers, representing a 56 percent increase over the 4,417,490 subscribers at the end of the second quarter 2005.
For the second quarter, XM reported revenue of approximately $228 million, an increase of 82 percent from the $125 million reported in the second quarter 2005. XM's net loss for the second quarter of 2006 was $229 million, compared to a net loss of $147 million during the second quarter of 2005.
The net loss for the second quarter of 2006 includes $105 million in de-leveraging and other non-operating charges that were not incurred during the second quarter of 2005.
XM still expects to achieve positive cash flow from operations for the fourth quarter 2006 and the full year 2007, although its ability to do so becomes challenging toward the lower end of the subscriber range.
Recently, rival Sirius Satellite Radio (New York) said it ended the second quarter with 4,678,207 subscribers, 158 percent higher than second quarter 2005 ending subscribers of 1,814,626. During the second quarter of 2006, Sirius added 600,460 net subscribers, a 64 percent increase over second quarter 2005 net subscriber additions of 365,931.
Total revenue for the second quarter of 2006 increased to a record $150.1 million, nearly triple last year's second quarter total revenue of $52.2 million. Sirius reported a net loss of $237.8 million, or minus $0.17 per share, for the second quarter of 2006.
For the year, total revenue is expected to hit $615 million, up from previous guidance of over $600 million. Adjusted loss from operations is expected to be $565 million, in line with previous guidance
Copyright © 2005 CMP Media LLC
http://www.informationweek.com/share...leID=191800268
08-06-06, 05:33 PM
#4
its just dumb journalist, both digital radio and ipod have its good uses. In fact, digital radio is significantly better than normal radio is, as supposed to how much more useful ipod is than cd mp3 players...
08-06-06, 07:51 PM
#5
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Originally Posted by spwolf
why would ipod kill satelite radio again?
Besides, Satelite radio is losing money like a drunk in vegas right now with no sign of profit any time soon, and MOST people don't want to pay subscription fees for radio. Inevitably they will have to do more advertising to get profitable, and then it's no better than terrestrial radio. Cell towers will probably be the next delivery mechanism for digital radio which could be offered for MUCH less than satelite radio costs.
And the current audio quality of satelite radio is still pretty lame.
So let's compare to iPod - the music a listener wants, at much better quality, for 'free'.
No brainer to me.
08-07-06, 02:37 AM
#6
Originally Posted by bitkahuna
Because with satelite you STILL don't get to hear what you want - yes there's 'narrow' music type channels, but who wants to listen to the same thing over and over, and who wants to keep skipping around finding 'channels'. The delivery mechanism is broken, just like television.
Besides, Satelite radio is losing money like a drunk in vegas right now with no sign of profit any time soon, and MOST people don't want to pay subscription fees for radio. Inevitably they will have to do more advertising to get profitable, and then it's no better than terrestrial radio. Cell towers will probably be the next delivery mechanism for digital radio which could be offered for MUCH less than satelite radio costs.
And the current audio quality of satelite radio is still pretty lame.
So let's compare to iPod - the music a listener wants, at much better quality, for 'free'.
No brainer to me.
Besides, Satelite radio is losing money like a drunk in vegas right now with no sign of profit any time soon, and MOST people don't want to pay subscription fees for radio. Inevitably they will have to do more advertising to get profitable, and then it's no better than terrestrial radio. Cell towers will probably be the next delivery mechanism for digital radio which could be offered for MUCH less than satelite radio costs.
And the current audio quality of satelite radio is still pretty lame.
So let's compare to iPod - the music a listener wants, at much better quality, for 'free'.
No brainer to me.
And of course, to get sports news, discussions about latest issues, etc.
08-07-06, 06:38 AM
#7
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Originally Posted by spwolf
how do you mean you get to hear same thing over and over? I actually do that with my mp3 player, which is why I listen to the radio - so I can hear something not on my current playlist...
With my digital music collection, yes I have playlists for specific types of music, but I also sometimes just play random tunes from all over, which means it's broad but I don't get tunes I don't like, and I'm still pleasantly surprised cuz I'm definitely going to hear tunes I haven't heard in a long time!
And of course, to get sports news, discussions about latest issues, etc.
I think I'd be more impressed with satelite if the sound quality were better. My DirecTV can stream 5.1 surround excellent quality - why can't satelite radio?
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08-07-06, 06:49 AM
#8
Lexus Test Driver
I would disagree. I believe that many people buy Satellite radio for other than music. I know that sounds crazy, but I believe that it is true. I personally bought it for Opie and Anthony, MLB and College Football. XM or FM, music is music. Plus, my VAIS unit came with an Ipod aux.
CV
CV
08-07-06, 06:50 AM
#9
Instructor
I love my XM radio. It costs less than the price of 1 cd per month. My CD collection isn't large enough for me to justify an IPOD and I don't want to spend the time downloading new music each week. Even if I had 10,000 CDs I would still want to hear new music. Personally, I think that XM and Sirus will eventually merge into 1 company. Your milage may vary. 
08-07-06, 07:01 AM
#10
Originally Posted by bitkahuna
Gotcha, let me clarify. If a station on satelite is broad in what it plays then in addition to pleasantly surprising the listener with stuff they haven't heard before it can also annoy the listener with stuff they don't like. But if a channel is very narrow, it can get monotonous.
With my digital music collection, yes I have playlists for specific types of music, but I also sometimes just play random tunes from all over, which means it's broad but I don't get tunes I don't like, and I'm still pleasantly surprised cuz I'm definitely going to hear tunes I haven't heard in a long time!
Now that's a good point. But as iPods begin to do wi-fi and can download or stream content automatically while you drive around, satelite is again made irrelevant and expensive.
I think I'd be more impressed with satelite if the sound quality were better. My DirecTV can stream 5.1 surround excellent quality - why can't satelite radio?
With my digital music collection, yes I have playlists for specific types of music, but I also sometimes just play random tunes from all over, which means it's broad but I don't get tunes I don't like, and I'm still pleasantly surprised cuz I'm definitely going to hear tunes I haven't heard in a long time!
Now that's a good point. But as iPods begin to do wi-fi and can download or stream content automatically while you drive around, satelite is again made irrelevant and expensive.
I think I'd be more impressed with satelite if the sound quality were better. My DirecTV can stream 5.1 surround excellent quality - why can't satelite radio?
... as to the WIFI - are you getting your ipod music for free? You still pay a lot for those songs... I am not sure how well would wifi work in fast moving vehicle...
08-07-06, 07:10 AM
#11
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Originally Posted by spwolf
why would ipod kill satelite radio again?
That's exactly what I was thinking?
I to this date don't have an iPod, and quite frankly was given one and I in turn gave it away as a gift. It is neat, but I MUCH rather the ability to listen to LIVE music via XM's MyFi.
An even better option which I am planning to get is Pioneer & XM's: INNO
Pioneer has just taken the wraps off its Inno XM2go player, and it sure does look like a big improvement over the first generation of XM2go devices. For starters, it's a lot smaller and lighter at 3.7" x 2.2" x 0.6"n and just 4.5 ounces. It'll also give you both live XM satellite radio content and the ability to store up to 50 hours of XM content, or you can fill it up with your own MP3s or WMAs. The Inno also has a built-in FM transmitter that'll let you shoot that satellite signal to any radio. The unit also has a full color 180x180 TFT that you can use to get stock quotes, sport scores and, of couse, song info. The one thing they haven't given deets on is battery life, which could make the deal a little less sweet.
Marcus
08-07-06, 08:15 AM
#12
Super Moderator
I also enjoy XM radio very much down here south of the border. Regular radio was already dead down here the moment I turned it on. Granted, with Ipod you can get the music you want, but I can already do that by burning a CD.
Want to see something neat, try www.singmedia.com
We do not have good wifi down here, but in the U.S. you could probably rig up one of these to get satellite tv in your vehicle via a laptop.
Want to see something neat, try www.singmedia.com
We do not have good wifi down here, but in the U.S. you could probably rig up one of these to get satellite tv in your vehicle via a laptop.
08-07-06, 08:18 AM
#13
Super Moderator
Originally Posted by CVsGX470
I would disagree. I believe that many people buy Satellite radio for other than music. I know that sounds crazy, but I believe that it is true. I personally bought it for Opie and Anthony, MLB and College Football. XM or FM, music is music. Plus, my VAIS unit came with an Ipod aux.
CV
CV
08-07-06, 09:02 AM
#14
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I guess it's a matter of personal taste. I had satt radio and ended the sub after 6 months; as mentioned I felt the delivery mechanism was terrible. My iPod, I put it in the dock every night and let it download the latest podcasts; the next day I listen to them. It's free, it's "live" radio, it's new content that I can fast forward or rewind... ya.
08-07-06, 09:27 AM
#15
Lexus Champion
On a high-end audio system, in my opinion Satellite sounds terrible. I have experienced this with Sirrius in my home and my brother's car. At moderate listening levels, it sounds acceptable in the car... turn it up and it goes south quickly.
And it sounds just about awful at any volume using the dock in the house. The output signal seems to be fairly weak, so you are foced to turn the volume on the receiver up quite a bit. This is fun when you switch back to another source and the audio comes blasting at you!
The iPod also compresses the files, but it seems to be much better in terms of sound quality.
Frankly, I still have to change stations frequently with Sirrius to find something I want to hear. With my 30GB Video iPod, I can always find something I want to hear!
And it sounds just about awful at any volume using the dock in the house. The output signal seems to be fairly weak, so you are foced to turn the volume on the receiver up quite a bit. This is fun when you switch back to another source and the audio comes blasting at you!
The iPod also compresses the files, but it seems to be much better in terms of sound quality.
Frankly, I still have to change stations frequently with Sirrius to find something I want to hear. With my 30GB Video iPod, I can always find something I want to hear!