XM To Launch "Roady" Radio For Youth Market

By Amy Gilroy On Aug 18 2003 - 6:00am

XM Satellite Radio announced a record second quarter in subscriber acquisitions and said it will offer a new low cost radio through Delphi that is aimed at the youth market.

The new radio, called the "XM Roady" radio, will feature a compact design and a choice of seven backlit displays and three interchangeable faceplates. The Roady is 40 percent smaller than the original Delphi SKYFi and also has a feature to alert users when their favorite songs are playing on any XM station. It is user-installable and is expected to ship in mid-September at a suggested retail price below $120 for a package that includes a new micro antenna (the size of an Oreo cookie), cassette adapter and power plug. A wireless FM modulator version should follow later in the year.

At a recent news conference, XM president/CEO Hugh Panero presented a positive picture of strong subscriber sales for the quarter ended June 30 and for the year. The company is maintaining a seven-fold lead in subscribers over rival Sirius Satellite Radio, reporting 692,253 as of June 30, compared to Sirius' total of 105,186 subscribers.

XM said it achieved 209,178 new subscribers for the quarter, marking its best quarter to date and a 43 percent increase from the first quarter. Panero said XM should hit the 1 million mark early in the fourth quarter.

OEM sales are tracking ahead of plan, Panero said. General Motors recently announced a production milestone of a half million cars with factory installed XM radios, he said, noting that GM expects to hit the 1 million mark ahead of schedule in March 2004, due to strong demand. Honda will also install in excess of 200,000 radios at the factory level in the 2004 model year, the company said.

Panero said GM is heavily promoting XM, through its own funding, and began offering free XM radios and a year of free service to Cadillac buyers in June. For those who buy a Cadillac in which XM is not standard equipment, GM supplies a free boom box with a year of free service. XM said 75 percent of GM customers who are offered a free year of service convert to paid subscribers.

In total, XM will be available this fall in 78 car models, with 65 of those offering it as a factory installed item. "It's the factory installation that really makes this business hum," Panero said.

XM also announced that 40,000 family plan subscriptions have sold to date, with half those being newly activated radios. On the car rental front, Avis accounted for 7,600 subscriptions as of June 30, he said.

XM noted that its satellites continue to show deterioration, without impacting performance at present, due to a general flaw discovered in Boeing 702 satellites in orbit. The company will launch a spare satellite during the fourth quarter of 2004 and is pursuing insurance claims, which are currently in dispute.