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SiriusXM 2.0 To Add Wi-Fi, Bluetooth

New York – SiriusXM 2.0 service
due in the fourth quarter will leverage Wi-Fi, Bluetooth and the Internet to
“create exciting complements” to the service’s expanded channel lineup, said operations
and sales president James Meyer.

As previously reported, the 2.0
service promises 25 percent more bandwidth to deliver more channels, which will
initially be available only through two new aftermarket transportable radios
due late this year.

Meyer also revealed, however,
that by year’s end, SiriusXM expects to announce 2.0 launch plans by at least
one automaker. That automaker will offer 2.0 service in mid-2012 through a new
satellite radio in a 2013-model-year vehicle, executives said. Discussions with
that automaker began well over a year ago, said CEO Mel Karmazin.

The company didn’t reveal the
capabilities that Bluetooth and Wi-Fi would add to 2.0 service, but both
wireless technologies could be used to communicate with SiriusXM servers through
a user’s cellphone or a vehicle’s embedded telematics system to personalize the
service in some way.

In a conference call with
investors to report second-quarter financial results, SiriusXM executives also revealed
that 2.0-compatible tuners would be software-upgradable to add new features
without forcing consumers or automakers to replace hardware.

SiriusXM’s Internet-delivered
service to PCs and cellphones would be upgraded late this year to add pause,
rewind and ability to time shift most channels up to five hours.

The Internet-delivered service
would add on-demand music and talk early next year, the company said, and
sometime in the first half it will add ability to personalize the company’s
curated content.

As previously announced, the 2.0
service’s 25 percent increase in bandwidth will enable the company to deliver a
major increase in Hispanic-oriented content, but the company also provided more
details about the Hispanic content, which will include a mix of Spanish and
English content, commercial-free music, plus news and sports. The additional
Hispanic content will enable SiriusXM to deliver 50 percent more content than
all the Spanish radio stations in Los Angeles, the company claimed.

The 2.0 service will also add new
music and comedy channels. As previously announced, 2.0 will offer replay and
time-shift functions, as some current satellite-radio tuners already offer.

In reporting its second-quarter
financial results, SiriusXM posted a net profit for the quarter and first half on
rising revenues and net-new subscriber additions. The first-half performance
followed the company’s first profitable year in 2010 since the 2008 merger between
Sirius and XM.

For the quarter, the company
posted respective revenue gains of 6.3 percent to $639.6 million, a record for
any quarter in satellite-radio history, the company said. First-half revenues
were up 6.8 percent to $1.26 billion.

Revenues could climb faster in
2012, given that Karmazin said the company would early next year price its
service “as we see fit” now that the Federal Communications Commission has
allowed rate caps, which were a merger condition, to expire.

Net profit surged to $173.3
million in the quarter from a year-ago $15.3 million, and in the half to $251.4
million from a year-ago $56.9 million.

The number of net new subscribers
grew sequentially in the second quarter to 452,127 from the first quarter’s
373,064, but was down from the year-ago quarter’s 583,249.

For the half, nonetheless, the
number of net subscriber additions was up from the year-ago half, hitting
825,211 from last year’s 754,690.

The subscriber base hit a record
21.02 million at the end of the half, and the company raised its full-year
forecast for net new subscribers to 1.6 million from a previously forecast 1.4
million. The company maintained its full-year revenue forecast of $3 billion.

The company attributed net
subscriber gains to an increase in U.S. light-vehicle sales and increasing
new-vehicle penetration.

In the future, Karmazin said,
reactivating satellite radios in used cars will be “a very significant catalyst
for growth.” He pointed to car dealers’ embrace of a GM program launched in
April to give purchasers of used Chevy, Buick, GMV and Cadillac vehicles a
three-month trial subscription.