CEA Anticipates More 12V Growth In SDAR
By Amy Gilroy -- TWICE, 2/13/2006
Although satellite radio is starting to mature as a market, CEA predicts shipments to retailers of satellite radio car-stereo-type devices will rise another 10 percent in units and 9 percent in dollars this year.
In addition, the market is expected to see another year of parity between retail and OEM sales, before the OEM market begins to take off in 2007, analysts said.
Analyst Vijay Jayant of Lehman Brothers, New York, estimates the retail/OEM breakdown for 2006 for XM Satellite Radio will include 1.45 million new retail subscribers and 1.65 million new OEM subscribers. For Sirius Satellite Radio, the split will be 1.7 million new retail subscribers vs. 1.5 million new OEM subscribers.
In 2007, XM's sales share will begin to tip in favor of OEM sales, said April Horace, equity research analyst for Hoefer & Arnett, San Francisco, noting that Hyundai, which sells 400,000 cars a year, will begin offering XM as a standard feature on all of its cars at that time.
In overall sales, Lehman predicts XM will finish the year slightly ahead in net new subscriber additions at 3.1 million, compared with an expected 2.9 million for Sirius. But retailers can expect to see more Sirius sales earlier in the year, as Howard Stern's presence should continue to boost sales through the first quarter. After that, XM will gain the lead, said Jayant. In total subscribers, XM expects approximately 9 million to Sirius' 6 million-plus by the end of 2006.
This year will also see some new product innovations on the retail side. Sirius stated that it will offer a “live” Sirius/MP3 headset/portable some time this year (the current S50 only records Sirius programming when docked in a cradle).
Sirius also previewed at International CES a new Sirius-to-Genaral Motors adapter that will open up the now exclusively XM/GM market to Sirius. The Sirius/GM converter, called the SIR-GM1, will be offered in the second quarter by Directed under the SiriusConnect program. It will be compatible with Buick, Cadillac, Chevrolet, GMC, Hummer, Isuzu, Oldsmobile, Pontiac and Saturn vehicles, totaling about 52 models. And it will work with GM models back to 2003 or 2004, said Sirius.
The SIR-GM1 ships with two harnesses, including one that connects through the XM radio cable. The interface, at a suggested retail price of $99.99 including the cable, antenna and tuner, joins other new SiriusConnect products expected for Sony after-market radios in the first quarter and Panasonic in the first half, said a Sirius spokesman.
XM, in addition to announcing new MP3/XM portable headset models at International CES from Pioneer and Samsung (see TWICE, Jan. 16, p. 8), also announced a new mini tuner that would essentially shrink the size and price of a plug-and-play tuner and even a direct-connect (XM Direct) tuner. The new mini tuner, called the XM Passport, is about the size of flash drive at a suggested retail price of $29.99. Suppliers will be able to offer front-panel slots on their head units for the tuner. Users can carry the Passport just as they would a flash drive, transporting it from home to car. The advantages are that it provides the same fidelity as a direct tuner but it allows one movable subscription fee, said product marketing and distribution director Rocco Tritarico.
“What we've been doing is asking consumers to pay for more than one subscription fee if they want that true direct sound … That's the thing that has been holding customers back. This is a real breakthrough for the car stereo business,” Tritarico said.
Audiovox will distribute the Passport and is the only supplier that has announced firm 2006 plans for the new tuners, although XM said that many leading brands are now examining it.
Audiovox will offer the product in two stages prior to the final stage, slated roughly for August, when it will supply head units with built-in slots for the Passport.
The first Audiovox Passport products will require a car docking kit, also at $29.99. Audiovox will offer an FM modulator designed to allow almost any radio to connect to a docking kit plus Passport tuner. The FM modulator, called the Blade, will be available in April at a price to be announced. By June, Audiovox expects to offer car head units with rear-panel inputs to connect directly to a Passport car dock without the FM modulator, it said. This will then be followed by Passport-ready head units with a direct slot, Audiovox said.
Note: Lehman Brothers Inc. and/or its affiliates beneficially own(s) 1percent or more of any class of common equity securities of XM Radio and Sirius Satellite Radio.
Satellite Radio Receiver Black Box And Transportable Sales| 2004 | 2005 | 2006 (est.) | |
| Units * | 2.603 | 3.621 | 4.0 |
| Dollars* | $208 | $292 | $318 |
| Percentage Increase (units) | 39.11% | 10.47% | |
| Percentage Increase (dollars) | 40.38% | 8.90% | |
| Source: CEA © TWICE 2006 | |||
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