Sirius Pushes Back Tuner Launch To Fourth Quarter

NEW YORK — Sirius Satellite Radio pushed back its rollout of aftermarket tuners to the fourth quarter from the summer and said automaker sales probably wouldn't begin until the second quarter of next year, almost a year later than expected.

At the retail level, aftermarket tuner quantities will be "very limited in the fourth quarter" to 20,000 units or less, said chairman David Margolese during a conference call last week with analysts. But "material quantities" will ship in the first quarter of 2002, he said.

Sirius attributed the delay in aftermarket tuner production to testing that's taking longer than expected. "The radios are holding us up, not the system's performance," Margolese stressed, contending the company's long-term prospects remained bright despite the delay.

The conference call was scheduled because analysts sought more specifics about the expected rollout than they were given during another conference call two weeks earlier, Margolese said.

During the previous conference call, Margolese admitted it was taking longer than expected to wrap up OEM agreements with automakers, mainly because of bureaucratic challenges compounded by such issues as a softening car market. In that call, he also warned that "to come close to the Street's consensus for our numbers, we have to launch by September [with aftermarket products]." He also said during that call that "we're not saying we'll miss September, but it is possible."

Following that conference call, a spokesman told TWICE that initially projected late-second-quarter availability of aftermarket tuners "has been pushed out a little" but that summertime shipments were still targeted. (See TWICE, April 16, p. 8).

As for automaker sales, a Sirius spokesman before CES said select car models were expected to offer Sirius radios in the first half of 2001. Now, Margolese said, Sirius's "best guess" for automaker sales is the second quarter of 2002.

The first tuners will be manufactured by Panasonic with discrete components rather than the eight Sirius chips being developed by Agere, formerly a part of Lucent. Radios with Agere chipsets will "follow right after," Margolese said.

In the conference call, Margolese also pointed out that:

• Sirius is "moving ahead" in reaching agreements for offering Sirius as a factory- or dealer-installed option.
• Sirius and rival XM Satellite Radio are working with unaligned automakers Honda, Toyota, Nissan and VW Audi to install dual-mode Sirius/XM tuners in their cars "as early as '02."