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Retailers’ Satellite Displays Change As Home, Portable Options Grow

The satellite radio market is changing, and retailers’ displays are changing with them.

Marketers cite the growing number of home and portable satellite radio options and the growing convergence of satellite radio tuners for home, portable and in-car use.

With the proliferation of hybrid satellite radio/MP3 portables, some retailers this year will display hybrids such as XM’s Helix, Inno and Nexus in their MP3 departments, said Dan Murphy, XM’s product marketing and distribution senior VP. Some retailers, however, will place them in their satellite radio displays, and other retailers will merchandise the devices in both areas, he added.

Mobile electronics specialty retailers are also taking new display approaches. “Up to this point, we’ve been a plug-and-play and direct-connect [hideaway in-car tuner module] business,” said Dan Jeancola, senior merchandising VP of the Seattle-based 52-store Car Toys chain. Now the company is planning “new displays to exploit all the possibilities,” he said. The car audio and cellular specialist, he explained, is creating active 8-foot by 10-foot displays featuring hybrid MP3/satellite portables, home and boombox docking stations for transportable plug-and-play tuners, and related accessories. “We need to make a statement,” Jeancola said. The statement, however, won’t include satellite-ready home A/V receivers.

“We see a big shift this year in home and portable listening,” Jeancola said. Not only are more consumers opting for home, boombox and headphone-stereo docking stations, but many consumers will opt for a growing selection of satellite-ready home A/V receivers and shelf systems, even if the subscriber already owns a dedicated car tuner or transportable plug-and-play unit. Like the detachable faces of anti-theft radios, Jeancola said, people will leave their plug-and-play tuner in the car and pay for a separate subscription or their satellite-ready home audio system.

Jeancola believes the percentage of subscribing households with two or more subscriptions is in the mid-teens, given the number of new cars equipped with satellite radio, the number of teens in a house and simple popularity. “Once you get one for the car, you’re hooked,” he said.

XM’s Murphy also sees demand rising for portable and home products because of growing product selections, a planned XM ad campaign and a new retail display program. In May, XM will launch “one of our largest” print and TV ad campaigns to boost sales of portable MP3/satellite radios, Murphy said. “Retailers building new displays with us in the digital music player area and in the satellite radio area, and many will have the displays in both areas,” he said.

The selection of XM-ready home products is also growing rapidly, he said. In the third and fourth quarters of 2006, 15 home audio suppliers will offer about 40 Connect And Play XM-ready home audio products, up from four or five models in late 2005, he said.

Sirius is also getting into the satellite-ready home audio products, with the first products in its Sirius Connect Home program due in May, a spokeswoman said. The products will include three RCA- and GE-branded products.

Sirius also began March shipments of its first shelf-system docking station for its S50 MP3 player, which time shifts satellite radio songs when docked with a home docking station. The S50 plays the time-shifted songs and stored MP3 files through included headphones. The Sirius-branded S50 Executive System retails for a suggested $249.

Home playback is already a growing market factor, according to XM and The NPD Group statistics. “More than half of our plug-and-play consumers buy docking stations for use outside the car,” Murphy said. That percentage has been “fairly consistent over the past year,” he said, but with a growing subscriber base, it means more people than ever are listening to their plug-and-play tuner at home.

NPD statistics show that retail sales of home docking stations rose 43 percent in units in 2005, while boombox docking station sales rose 19 percent (see table).

Separately Sold Docking Kits For Plug-And-Play Satellite Tuners

(Retail-Level Units*)