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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerWhat's more, Sirius XM will introduce new products. Perhaps these will include what the blogosphere is buzzing about today -- a new Internet application that would stream Sirius XM to portable devices, namely the Apple Inc. (NASDAQ: AAPL) iPhone, as noted by Citigroup's Tony Wible.
Apple's iPod and iPhone products, as well as other digital music players, have been named as competitors to satellite radio by Karmazin himself. If these reports are true, could he be trying to transform them from competitors into boosting the company's user base, creating a complementing, rather than competing, services?
Well, there are several issues with that: 1.) It's been over a year that with little tweaking, iPhone users have been able to listen to Sirius and XM radio. So far, this hasn't increased subscription, but perhaps a direct application that's properly marketed would. 2.) The analyst claims this would make SIRI more of a content provider and help attract users as the initial cost to the user would be minimal (no need to buy hardware). But an iPhone does not replace a car radio where hardware might still be needed. 3.) As for relying on content, this is where the real question lies. True satellite radio fans believe in the content, which is another reason they believe in the stock. But will Sirius XM become mostly content provider, abandoning its lucrative car market (despite the recent weakness).
As a long-time bear on satellite radio, the stock price has supported the case all by itself. This year alone Sirius XM had declined 54%. But perhaps now, after the beating the stock took, the merger, and the ability to now look forward and plan properly, perhaps it's finally time to give this one a chance.
Still, when CEO Karmazin says to Bloomberg Television "We need to get the revenue up beyond the cost of operating our business," one is left a little speechless, thinking, You don't say, Mel! Isn't that exactly what's been plaguing you all along?
SIRI stock is up 4 cents, or 2.9% today to $1.42 as of 1:50 p.m.
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Reader Comments (Page 1 of 1)
8-14-2008 @ 4:21PM
Sheldon L said...
The only thing to reconsider is if you did not sell two years ago when many of us posted same...
Those that want to buy or hold should reconsider -- ;-)
8-14-2008 @ 8:40PM
Beltway Greg said...
Pandora.
Beltway Greg
8-15-2008 @ 7:12AM
ZenInvestor said...
Look, you are a bear on the stock and I don't expect to change that, but 'cars' are not the only market for SiriusXM and never have been. My Pioneer Inno gives me stock quotes, weather, is an MP3 player, and is portable from car to car and operates at home and anywhere outside with headphones. For people who travel, either for work or pleasure (think RV's) SiriusXM is fantastic. Also, with the increased bandwidth and increase number of channels with the merger they are now streaming content to the DVD players in cars with Disney.
They ARE a 'content' provider, and with all of the sports as well as NPR, CNBC, Bloomberg, MSNBC, CNN, and Foxnews you are never 'out of touch' anywhere in the US and Canada.
Your narrow view has you missing multiple revenue streams that are now available, and in addition the ability to 'stream' on the IPhone really was not practical until the new 3G version came out. The new application that is announced, but not out yet is the first one sanctioned by Apple.
The 'facts', and not your 'bear' emotions will propel SiriusXM in the future. This stock has real upside to those with the vision to see it. Obviously 'vision' is something you are lacking.
8-25-2008 @ 11:08PM
Slapshot said...
Wall Street loves smashing broadcast stocks these days. Apparently thinking the 20%+ returns of the 90s would never end the Street endlessly bashes the whole sector time after time after time. There are still people out there who believe in the future. Those of us who do don't believe in the Street anymore.