Prices Drop On Satellite Radio

By Amy Gilroy On Jan 9 2003 - 8:00am

While satellite radio begins a concentrated push into the home and portable markets (see news story, p.7) the products on the car audio front, continue to evolve, reaching new, lower price points and achieving greater simplicity.

Some Sirius suppliers including Kenwood are expected to show the first single-chassis head units, which do not require an outboard tuner. In addition, suppliers are racing to bring prices down on both universal RF or FM modulator tuners (which work with any radio) and on dedicated tuners, designed to work with certain head units.

Universal tuners have quickly emerged as the meat and potatoes of the early satellite radio market with 60 to 70 percent of sales in this segment. They have also become the focal point of a mini price war in the latter half of 2002 with prices dropping to below $199, from $299 initially. "The add-on RF business very quickly eroded to a commodity type of proposition where price became the only determinant for sales. There is no margin in the product," said Alpine marketing VP Stephen Witt.

The price war is due, in part, to the fact that satellite radio companies are subsidizing universal tuners to drive down prices. Both Sirius and XM have acknowledged some form of subsidies.

A Sirius FM modulator tuner from Jensen, called the SR2000 was advertised at times last year for $49 after a $75 Sirius rebate, according to Jensen. Pioneer placed a $50 rebate Nov. 1, 2002, on an XM FM modulator tuner, called the GEX-FM903 for a net price of $149 and Kenwood and Sony also ran rebates.

Kenwood said it will debut a new lower cost Sirius universal FM modulator adapter in May and Pioneer will introduce a new entry level XM universal adapter to replace the GEX-FM903XM. The new model GEX-FM913XM is expected to ship in January at a retail price to be announced.

Alpine expects to offer a lower cost universal XM tuner in the second quarter and a dedicated XM tuner for under $200 in the first quarter.

Clarion, at press time, said it was attempting to drop the price of its current Sirius FM modulated tuner, the SIR FM, from $229 to $199.

Pioneer said it will also introduce a new high end XM universal adapter, as part of a good, better, best line strategy, to offer a selection as the satellite radio market expands, said the company. The new GEX-FM917XM comes with a larger, brighter Organic EL display with 16 character readout. It also has an improved interface with a 10-key pad for direct channel access and a rotary knob for controls. The GEX-FM917XM is expected to ship in April at an estimated suggested retail price of $350.

Car to home shuttle products have also become a big hit in satellite radio with XM claiming its Delphi SkyFi, introduced late last year, is now the best selling XM product on the market.

Kenwood is debuting here, its first Sirius shuttle to ship this summer. The DIN sized unit will allow a single Sirius receiver to be transported from the car to home. The unit is expected to carry a suggested retail price under $150 with the home and car kits at approximately $60 to $70.

Suppliers are also offering satellite radio ready head units here at increasingly lower prices, with Pioneer's 2003 XM ready lineup starting at $170, compared to $200 last year and Alpine's XM lineup beginning at $200 versus $300 in 2002.