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Car A/V Reacts To Sirius XM App

6/18/2009 01:25:00 PM

Back in the old days, around when the iPhone first came out, the launch of a Sirius iPhone app would have caused panic in the car A/V retail business. But now, like the tree in the forest, it was barely heard falling.

 

Retailer business in satellite radio has fallen off so sharply in the past two years that the response to the Sirius XM iPhone app released Thursday was a rousing, “Eh. It might have some impact.”

 

On the plus side, it might drive an iPhone customer into a car A/V store so he can connect his phone or iPod Touch to his car radio, leading Car Toys merchandising senior VP Dan Jeancola to note, “There may be some increased demand … but, little impact overall.”

 

Hip music listeners in the car tend to fall into one of two camps. They either rely on their iPod in the car or they subscribe to satellite radio. So Chris Edwards, sales manager at Discount AutoSound in Virginia Beach, Va., shook his head at the news of the Sirius XM app.  “You’re going to take away the one thing that is truly [boosting] up your sales. People go one way or another. They are either satellite-radio people and they don’t need an iPod, or they are iPod users.” In other words, “goodbye” car stereo satellite-radio hardware. But, wait, that has been gone for two years anyway.

 

So that’s why Edwards thinks it could prove to be good news. First, as other retailers, he wants to see how well the app holds up in the car. Lots of ideas for the car sound good until you actually road-test them. (One of the first sound systems for the car in the ’50s was a phonograph.)

 

Second, maybe Sirius XM will finally beef up advertising and drive some excitement, something we haven’t seen since the merger. One more point from Edwards — Sirius XM is a low-margin product where the dealer’s money is made on labor. So if the iPhone crowd starts bringing their iPhones into the store to say, “Hook me up,” retailers will get their labor fees one way or another.

 

A few other companies stand to gain from the application: Autonet Mobile, which makes car Wi-Fi hot spots, and car kit makers like Pro.Fit or PanaVise. As far as I could tell, there are no car kits available on the Apple Web site.

 

Autonet Mobile hasn’t tested the Sirius app yet but said that Internet radio on an iPhone is subject to stalls and dropped calls — more so than a voice call. Your reception will largely depend on your area. “When the car moves between towers and moves between a high-speed and low-speed network, you can experience a slower session, and music player [apps] are only geared for one network speed,” claimed Autonet Mobile CEO Sterling Pratz. A data network may dip from 1.2MB to 800K to 60K within a short distance, resulting in a stalled or dropped session, he said.

 

“When you’re on foot, it’s not a big deal because you don’t move that quickly. If you walk between towers, it can take minutes to make the transition. In a car you do it in a second.” He added, “When people start bringing their devices in the car, they will experience more problems. They are more susceptible than cellphones because it’s more content being moved. Cellular voice is a low bit-rate network … In data, if an app is set up to work at a 120K stream and availability drops below, it will get a drop or a stall.”

 

I haven’t tried this out, although I have heard from my favorite Apple fan — Larry Reich, who drove around in the rain today using the app on a seven-day trial — that it worked fine.

 

Pro.Fit, the car kit maker, said its sales are a barometer of how a product is faring. It has been selling lots of kits for iPhones, and its OEM business for satellite radio is “dead.” Scott Swanson sales director said of the Sirius app, “I think it’s going to be the saving grace of the satellite-radio industry.”

 

Not so, said iSuppli analyst Mark Boyadjis who believes, after the seven-day trial, users will return to Pandora and other free radio services rather than sign up for a $13-plus monthly subscription to Sirius XM.

 

It should be noted, on the App Store today, there was much ranting that Howard Stern was not included in the Sirius app service. Among free music apps listed on iTunes, Sirius XM was ranked No. 1, ahead of Pandora Radio.

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