iPods Killing Satellite Radio
12.16.06 - 09:36am
XM Satellite Radio used to sell shares for $45 six years ago and Sirius Satellite Radio sold for $63. Today, however tells a
different story. XM now sells for around $15 and Sirius only around $4.
Why? The iPod and iTunes. Satellite Radio was created before the iPod, providing listeners a way to hear commercial free music, but with the iPod coming into existence - consumers could not only listen to music commercial free, but it could be music they loved - thousands of songs - at their fingertips. That combined with the ability to add or delete music on a whim has helped Apple sell over 70 million units in just five years, while XM is ending the year just short of eight million subscribers.
Not only has satellite radio been trod on by the iPod, it has also faced the competition in cell phones. Nokia predicts selling 80 million music phones this year alone.
Sirium and XM are expected to become cash flow positive in the next year but the low growth and the question of whether there is any growth left to be had is keeping investors out and stock down for satellite radio.
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