Sirius Delays Launch While XM Begins Rollout In The South

By Amy Gilroy On Oct 22 2001 - 6:00am

As XM Satellite Radio was preparing to roll out to the Southern half of the United States, Sirius Satellite Radio announced last week that it had delayed its nationwide launch beyond the end of the year target date, and that David Margolese stepped down as CEO.

According to VP marketing and distribution Doug Wilsterman, Sirius is not ruling out an early 2002 launch although firm launch plans will not be announced until Nov. 14.

Autosound suppliers, several of whom were planning to release Sirius tuners in December, said it was too soon to determine the effect of the delay on their launch plans.

Many agreed with Panasonic national marketing manager Rob Lopez who said, "For us, all indications were that we were launching in the fourth quarter. Now, obviously, this new development will cause us to rethink our strategy as far as a launch, and we're waiting to hear from Sirius to offer some direction."

Panasonic expects to supply a full line of Sirius-ready head units in January 2002, and was planning to release select Sirius products, including possibly a Sirius tuner and antenna, in the fourth quarter.

Kenwood was also targeting a December release for Sirius tuners and antennas. VP sales and marketing Bob Law noted it was premature to answer questions on changes in the company's launch plans. Kenwood has completed Sirius field and lab testing and according to Law, "everything is working. We just conducted a test on the West Coast using an actual receiver." In addition, Law expects that tuners and antennas will be sold separately initially, versus bundled.

At press time, Jensen was planning to offer several Sirius products including a new plug-and-play cassette adapter tuner which can be inserted into any cassette player to receive Sirius reception. In addition the tuner, called the SRP-2002, will work with CD players either through the rear or front auxiliary inputs. The SRP-2002 will come with a magnetic-mount antenna and a receiver, about the size of a radar detector, that can be placed anywhere in the car. It also has a tethered four-line display. Shipping for the SRP-2002 is slated for the first or second quarter 2002, with pricing to be announced.

As announced earlier this year, Jensen is also planning to ship the SSR-2000 universal Sirius add-on tuner with FM modulator and auxiliary input which is designed to work with any type of car radio. Also planned for the end of the first quarter 2002, is a Sirius-ready receiver, without a built-in Sirius tuner, called the SR 4510. The AM/FM/CD will feature a Sirius display and controls at a price to be announced. According to Dale DiBernardo, senior program manager Recoton mobile electronics, the company is also hoping to show an AM/FM/CD boombox with Sirius capability at the upcoming CES.

Clarion is planning to ship five Sirius-ready head units in January or February 2002. The company is currently testing Sirius chipsets and expects to see a sample head unit from Clarion Japan by this week for a final check before mass production, said director of product planning Jack DeBiasio.

Sirius also announced last week, that it expanded its in-vehicle field testing to six additional markets. Said Wilsterman, "We are in the final stage of our testing.

We have not yet completed the evaluation of our system to make sure that it meets the demanding criteria we set for it. We've been pleased with many of the results but its just not complete at this time."

Also last week, XM was expected to expand its service to both the Southeast and Southwest regions. "Originally we planned to release in the Southwest, but a number of retailers in the Southeast wanted to begin selling early or before the promotional campaign, which is great," said VP retail marketing Dan Murphy. Advertising for the Southeast will begin Nov. 1, he noted.

Both XM and XM suppliers such as Pioneer say sales are meeting expectations, with Pioneer claiming it is having trouble keeping up with demand.

Without publicly disclosing activations beyond the 400 subscribers signed up in the initial phase of the Dallas/Forth Worth and San Diego launches, XM said "we are right in line with our business plan. The only modification we made in September was subtracting the expectations for the sales of the Sony units." Sony delayed shipping its DRN-XM01 shuttle system until last week.

If it weren't for the terrorist attacks, Murphy said he suspected sales would have been well ahead of plan. "September 11 took a great deal of retail traffic that would have been exposed to XM and possibly we would have exceeded our business plan wildly instead of meeting it. It distracted people from some of the coverage we got."

Pioneer, one of the leading suppliers of XM units, said it is currently in back-order although it hopes to catch up with demand by the end of the month. "It's safe to say there's a lot of pent-up demand in the industry and a lot of positive things have been written about it. We're shipping every piece of product we can get from our factories," said VP product planning Keith Burnett.

Pioneer is currently selling more XM FM modulator tuners than add-on tuners, as expected, according to Burnett. The company is not yet advertising XM, although it expects to in the near future, once XM resumes its TV ad campaign. "We're still taking a wait-and-see approach because obviously with the tragedy, XM has slowed down the rollout of advertising, but once they begin promoting the category we will as well," Burnett said. XM said its redesigned TV ads will be ready at the end of the month and it continues to sponsor radio spots and billboards in appropriate markets.

XM has said it expects 100,000 tuners to ship by December.