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."