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TMO Reports - Sirius Exec: We've Talked With Apple About a Combo Product

by , 10:00 AM EDT, May 26th, 2005

Sirius Satellite Radio Chief Executive Mel Karmazin told shareholders Wednesday it has talked with Apple Computer about a Sirius-enabled iPod, but that no deal has been struck.

Mr. Karmazin, responding to questions during the annual Sirius shareholders' meeting in New York, said the company has "had discussions with everyone," including makers of cell phones, digital music players and other devices. He said that he had had dinner Monday night with Apple CEO Steve Jobs and other digital entertainment-related executives at the Wall Street Journal D: Conference outside San Diego, Calif. He did not elaborate on the topics discussed with Mr. Jobs.

"Will there be MP3 players that include satellite radio? Sure. The technology's easy," he said. The issue, he explained, is whether a combination MP3-like device that plays satellite radio would hurt Sirius's business and just how they would split the profit from equipment and monthly subscription with someone like Apple.

"If we don't do a deal, our current business plan is just fine," Karmazin said.


Sirius Satellite Radio Chief Executive Mel Karmazin said his company has talked to Apple about a combo Sirius/iPod device, but that no deal has been struck.

Sirius is the second largest satellite radio provider in the U.S. behind industry leader XM Satellite Radio. In January, The Mac Observer reported XM had had discussions about a combination portable media device and XM receiver with a number of major manufacturers, including Apple, but no formal partnership has been formed and there were no plans for an imminent announcement.

XM Director of Product Marketing, Phil Whitworth said that while the company is very interested in developing a MP3-like device that includes XM's service, it is not as high of a priority right now compared to expanding its reach into home entertainment devices, such as stereo systems and alike.

"Generally, are current focus is on home entertainment," Mr. Whitworth told TMO. "We working with a number of companies to make sure XM technology is embedded in home stereo systems, boomboxes, and more."

Mr. Whitworth said XM has talked to a number of major players in the digital media device market, such as Apple and Microsoft, but said, "they have no been active discussions. They have been more along the lines of introducing our technology and discussions of possible ways of bringing a digital music player together with XM's service."

Chance Patterson, XM company spokesman, cautioned that talks with Apple do not mean an agreement for a iPod-like product with XM service built in is a done deal.

"We talk with a lot of companies," Mr. Patterson said. "That doesn't mean they have committed to building in our chip or our service. That doesn't mean it couldn't happen in the future, but it doesn't mean it's happening sometime soon. We have no imminent announcement."

While the current push is to get XM into more traditional radio devices, Mr. Whitworth emphasized that working with digital media device makers will be more of a focus in 2005 and beyond.

"There is no reason why we can't embed the XM 'Connect-and-Play' technology into MP3 players, like the iPod," he said. "There are no limitations to making XM technology a part of small, digital media products. We're excited about exploring those possibilities with manufacturers and those discussions are on-going."

Emphasizing again the push to get XM technology into home entertainment products, Mr. Whitworth said it's too early to say when and with whom XM could partner with on a portable device like an iPod, iRiver, RCA or Samsung player.

"We can't leap ahead of ourselves," Mr. Whitworth commented. "It's too early to set a time line on a XM ending up in digital devices, but it's on our radar."

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Small White Car Posts: 1933 Joined: 02 Jul 2004
Subject:

I could see this working in the same way the U2 iPod works. It would be a seperate product that most people wouldn't choose to buy but it would be there for those who do.

I doubt we'll ever see any kind of radio become a standard feature on ALL iPods, but it could be a feature on some for sure.

View Name:RealityCheck -   Troll Posts: 392 Joined: 06 May 2004
Subject: Jobs Will Claim People Want To Pay For Apple Radio
Close Name:Small White Car Posts: 1933 Joined: 02 Jul 2004
Subject: Re: Jobs Will Claim People Want To Pay For Apple Radio

Quote
RealityCheck wrote:
Watch Jobs change his tune about people wanting to own their music once Apple starts its own proprietary overpriced radio service.


Uhm, then why would they be talking to Sirius?

View Name:Guest
Subject: "sirius" possibility
Close Name:Small White Car Posts: 1933 Joined: 02 Jul 2004
Subject: Re: "sirius" possibility

Quote
Anonymous wrote:
From the Apple standpoint, the who does the radio integration really benefit? Apple doesn't really need the radio to sell more iPods, but several million iPods with radio capabilities could be huge to Sirius. All of a sudden, you have potential customers.

Other thoughts - Apple isn't going to incorporate a feature into the iPod that won't be utilized by the majority of users. How many customers would buy an iPod, then expect the radio service to be free?


Take both of those facts and put them together...

To me that says a good idea is for Sirius to sell some sort of radio-iPod to their subscribers. Just like you have HP selling iPods, they could have Sirius selling a different kind of iPod too.

That way the people who are buying them already pay for Sirius and understand how that works, and Apple isn't confusing their main customers because this item isn't in regular stores.

Close Name:MarcelV Posts: 19 Joined: 30 Oct 2004
Subject: Podcasting is Apple hope....

Apple's hope is that podcasting, and the iTunes integration, will make the whole real-time satellite radio integration obsolete. Why would it be necessary when you can download podcasts of the same radio shows? That would be much more beneficial for Apple, cheaper for the product itself (there's no need for chip integration, current product will work fine) and it leaves Apple independent (no long time dependency on a vendor, that may or may not renegotiate the deal when current contract expires and if not happy, will pull the plug. Apple will look bad, because their name is on the hardware..... Just my thought, opinion

View Name:Guest
Subject: Timing Not Right
Close Name:RealityCheckup Posts: 29 Joined: 15 Jul 2004
Subject:

Quote
RealityCheck wrote:
Watch Jobs change his tune about people wanting to own their music once Apple starts its own proprietary overpriced radio service.
God this has to be the worst post you've ever made. it's like you didnt even read the headline. although even if you did read the headline you know that apple is talking to SIRIUS, not THEMSELVES.

Oh yeah, getting unlimited music anywhere in the United States at any time at full CD quality...that's not worth $12 a month.

View Name:Guest
Subject:
Close Name:gslusher Posts: 2001 Joined: 13 Nov 2002
Subject: Re: "sirius possibility"

Quote
Guest wrote:
Other thoughts - Apple isn't going to incorporate a feature into the iPod that won't be utilized by the majority of users. How many customers would buy an iPod, then expect the radio service to be free? Imagine if they were then todl, "well, you have to pay for the radio service." Ouch! Not really the best way to earn customers. Also, imagine other competitors saying "With a Creative Nomad, the radio is free!" Customers aren't smart enough to weigh the benefits of broadcast verses satelite radio.


You underestimate people. Those who buy Sirius (as I have) or XM know what they're getting. It's not cheap--about $300 for my car radio plus about $12.95/month, so people generally think about this quite a bit before buying.

I was going to add that there were few small, easily portable satellite radios, but check this one out:

http://www.xactcommunication.com/Sirius-Satellite-Radio-7/Rego-84.html

It says that it is an MP3 player, but doesn't say how one gets the MP3s into the radio/player.

Xact's other "small" Sirius receiver, the XTR1

http://www.xactcommunication.com/Sirius-Satellite-Radio-7/XTR1-SIRIUS-Satellite-Plug-and-Play-Receiver-12.html

requires external power and antenna. To use it "portable," you have to buy a "Power Pod," which is considerably larger than the receiver.

http://www.xactcommunication.com/Sirius-Satellite-Radio-7/XS028-Sirius-Satellite-Radio-Power-Pod-Portable-Battery-Pack-18.html

Close Name:gslusher Posts: 2001 Joined: 13 Nov 2002
Subject: Addendum

I wrote to Xact about their new "MP3 player" + Sirius receiver. The person who replied didn't know if one could load MP3s from a computer, but said that one could record up to 4 hours of Sirius programming.

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