Integration Products May Impact Satellite Radio

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For the first time in car audio, aftermarket integration products could impact a new technology, even before the product is fully deployed.

New integration kits for digital satellite radio from Blitz Safe, based here, and other companies are threatening to blur the line between radio brands that will work with XM Satellite Radio or with Sirius service. One of the first of these kits, from Blitz Safe, is selling like wildfire, according to Blitz Safe president/CEO Ira Marlowe, who expects to move a total of 60,000 integration kits in the next six months. Marlowe said 10,000 integration kits have sold in only a few weeks of shipping.

The Blitz Safe integration kit, which retails for $95, specifically allows Kenwood Sirius-ready head units to operate with a Pioneer XM tuner, without degrading the sound as with an FM modulator. Integration kits will also soon be available for Alpine and Sony XM tuners, said Marlowe. Given that Sirius is expected by analysts to acquire 150,000 to 200,000 subscribers for its first year, a loss of 60,000-plus early adopters to XM might be significant. In addition, Kenwood is by far the dominant Sirius supply partner.

Larry Pesce, product management and strategic planning VP for Sirius, said, "Obviously I couldn't even try to comment upon their unit numbers, because I don't know what it's based on. Do we see it as a threat? Not in the least. A true early adopter is reading the magazines and looking at the technology and when we lay our technology and programming against XM, we think the early adopter will select us." Pesce referred specifically to Sirius' statistical multiplexing technology and the fact that it has more commercial-free channels.

Another spokesman for Sirius claimed it is working on similar deals with aftermarket and OEM integration companies that will allow XM radios to operate on the Sirius service.

Several other companies, including Precision Interface Electronics (PIE), Chatsworth, Calif., SoundGate, Sheridan, Wyo., and Peripheral, Clearwater, Fla., said they have also begun offering auxiliary input products that allow any factory radio to interface with either of the satellite radio services, when used with a controller/display and an aftermarket tuner. These are the same products that will also work with DVD and MP3.

Reaction to the interface products from retailers appears positive. Dan Jeancola, mobile buyer for Sound Advice, Dania, Fla., said, "I've got customers chomping on the bit for it [Blitz Safe]. I have them on order, and as soon as we get it we'll probably sell through. It's the early adopters that have a Kenwood radio and they don't want to wait for Sirius to come to their market. I can tell you I have close to 100 on order for 25 stores." He said of the budding converter market, "There's guerilla warfare going on."

Al & Ed's said it expected to carry Blitz Safe's kit in the next 60 days and Crutchfield said it was evaluating the product.

One retailer noted privately that he was concerned about possible legal issues resulting from the integration product, however Blitz Safe vigorously denies any. Alpine VP marketing Stephen Witt agreed, claiming, "To the best of our knowledge it's not illegal. You do get into some gray areas of copyright and patent infringement, and it's gray due to the sum of the reverse engineering necessary to emulate the BUS systems that are proprietary to each manufacturer. But it's gray, it's not a black-and-white issue."

Marlowe added, "There are no legal issues. We're not modifying or affecting anyone's product or service in any way, shape or form. We're just giving people choices."

The ability of OEM integration companies to offer interface products so soon after XM's national launch is testimony to the growing agility and power of these companies, said industry members.

"This segment of the automotive industry has gotten to where they can, almost overnight, come out with new cables that connect CD changers to a new OEM head unit. Their ability to identify opportunities and react has improved greatly over the years, as they have had to react to the dramatic changes in OEM head-unit integration," noted XM VP marketing and retail distribution Dan Murphy.

Most suppliers said the issue of integration may become less volatile when Sirius deploys its service nationally in August, and as suppliers begin supporting more than one satellite radio provider. Also, by 2004, radios will be available that can receive both services.

Jeff Abrams, manager of technical marketing and training for Clarion, which just began shipping Sirius tuners and will offer XM aftermarket products next year, said of the integration kit issue, "I think it will become less important as we launch in both platforms."

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