Here are some late Friday thoughts on this week’s news in car electronics.
Sirius XM: You may have heard that Charlie Ergen, CEO of EchoStar, is acquiring Sirius XM debt with an eye for winning control of the satellite-radio company, the Wall Street Journal reported.
Now analysts are starting to put two and two together, noting that former Sirius CEO Joe Clayton joined the EchoStar board of directors in October.
If the WSJ report is true, then EchoStar may be looking to bring satellite video to cars, said Reuters, possibly seeking to use Sirius and XM repeaters on the ground that help amplify the satellite signal.
I’ll just note that a lot of companies are pouncing on the same theme — aiming to bring video to an estimated 20 million video screens already in cars. AT&T CruiseCast is launching a backseat TV service in March, and Audiovox and Qualcomm’s MediaFLO are launching a video service in October. Also, ICO Global Communications plans to follow next year. The services are planning to offer 20-plus channels and to charge monthly fees — something that consumers do not take kindly to in a recession. Then again, some parents may well pay $15 to $25 a month and more for a little peace and quiet in the car. We’ll see.
Also of note, if Sirius XM filed bankruptcy, it might allow Sirius XM to release itself from contracts such as the $500 million, five-year agreement it has with Howard Stern, said the WSJ.
PNDs: Analyst Rob Sanderson of Broadpoint AmTech declared that 2008 might have been the peak year for personal navigation devices (PNDs). I’m still looking into this, but Mio said it is planning for low-single-digit growth this year — still a far cry from the triple digit industry growth in 2007.
Nuvifone: Sanderson believes that the Garmin Nuvifone, due for release in the next few months, has a better chance of success now that Garmin created an alliance with AsusTek to develop and market the products.
Sanderson likes the fact that Garmin is now sharing the costs for investment on Nuvifones (even though it must also share profits). He believes that navigation on a smartphone will have only a niche appeal, and “the move to partner with Asus could suggest that [Garmin] management agrees.”
Another concern is that Nuvifones will cannibalize sales of Garmin PNDs.
The Nuvifone needs to sell at least 3 million to 4 million units to reach break-even operating profits, he added. He estimated Garmin’s R&D investment at $25 million.
Auto Sales: It was another rough month for auto makers in January. Chrysler’s sales fell 55 percent from January 2008, GM’s sales were down 48 percent and Ford sales were off by almost 40 percent, according to reports. The damage spread beyond U.S shores, with Toyota sales off by 34 percent, and Nissan down 30 percent. Also down was Volkswagen of America, whose sells fell by 12 percent, although Hyundai sales were up 14 percent.
