the new sattelite
02.22.07 - 10:28am
The iPod is getting a not so new, but perhaps a more formidable adversary as XM and Sirius radio settle their differences and merge into one company.
Satellite radio has seen a slow-down with the public falling in love with the iPod and also with the new MP3 phones - the question, has been is there a need for satellite radio anymore and can the merge create a new company that will spark fresh life into satellite radio?
Initial shares showed the approval of shareholders as Sirius saw stocks rise 12 percent and XM skyrocketing 30 percent. The total merger increased the companies stock worth about $4.85 billion, however even with the public approval of the merger it still has yet to pass U.S. regulators who have to decide whether the combination will create a monopoly or whether the new emerging technologies, such as the iPod amount to competition.
“I think they are going to prevail,” said Howard Liberman, partner at Drinker Biddle & Reath and a former counsel for the commission. The key, he said, is that antitrust officials redraw the market. “If they define the market as satellite radio, they are sunk.”
The merger, to many is essential to the life of the companies. Carmi Levy, senior research analyst at Info-Tech Research Group in London, Ontaria said, “Left on their own, both of these companies are likely to implode.”
Currently XM and Sirius have 14 million subscribers between them with a projected growth rate of 30 million in 2010. This is down from the earlier projected growth rate of 40 million, due to the slow-down this year, however if the merger is allowed to go through it’s possible everything changes.
Speak Your Peace