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

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

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.