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Dock-And-Play Satellite Radios Continue To Lose Ground To OEM: Survey

3/12/2010 04:23:00 AM Eastern
WESTLAKE VILLAGE, CALIF. — Transportable dock-and-play satellite radios that can be shuttled between home and car audio systems have lost ground in recent years to OEM satellite radio in the car, a J.D. Power and Associates survey shows.

The survey of 19,000 consumers who bought or leased a car in the past five years found that 35 percent have satellite radio in the car, up from only 19 percent in 2006, but the percentage of consumers with a transportable satellite radio in their car has dropped signifi cantly as satellite- equipped OEM sound systems have become more common. The percentage of respondents who own a transportable radio dropped to 9 percent in the latest survey, taken in September and October of 2009, down from 24 percent in the 2006 survey. A total of 85 percent of incar satellite-radio owners own an OEM satellite system, the survey found.

The percentage of car satellite-radio owners with built-in satellite radio installed after a vehicle’s purchase or lease also continues to slide, the statistics show. That percentage is now down to 5.5 percent from 17 percent in 2006.

Among all respondents with satellite radio systems in the vehicle, 70 percent have an active subscription, whether they are paying for the subscription or are using a free trial subscription, the survey found. In previous surveys, the company did not ask consumers whether their subscription was active, assuming that all subscriptions were active, a spokesperson noted.

Because the responses are from consumers, the percentages might not exactly match data provided by automakers or satellite radio companies, a spokesperson said.

In part because of the automakers’ dominant satellite-radio position, satellite- radio sales through retail outlets have fallen dramatically, CEA statistics show. Factory-level sales of satellite radio to dealers peaked in 2005 at $447 million and slipped every year after that through 2009, when sales dropped to an estimated $64 million. CEA forecasts declines through 2013.

Other statistics point to the dominance of OEM products in the satellite radio market. In 2006, the majority of XM’s net new subscriber growth came for the first time through automakers and car rental companies. In 2007, Sirius followed with a majority of its net new subscribers coming through automakers, not including car rental companies.

A study by Lazard Capital Markets estimates that satellite radios were built into 53 percent of new cars sold in 2009, and it forecasts an increase in 2010 to 62 percent, up from a 2004 penetration rate of less than 10 percent.
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