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January 12, 2007

speculation

How a Sirius and XM merger would affect Apple

Posted Jan. 12, ’07, 1:02 PM PT by Aaron Freedman
Category | Apple » Speculation

Xm Sirius Satellite Radio Merger There’s been some buzz around the web lately that Sirius and XM, the two major satellite radio companies in the U.S., will merge. While I’m not sure if this is true, it does bring to mind something — how would an XM-Sirius merger affect Apple?

It seems that Apple would have an obvious interest in either XM or Sirius, as satellite radio built-in to an iPod would make a lot of sense, especially if radio programming could be recorded directly to an iPod. It would be possible, then, for Apple to either make a deal with or even buy Sirius or XM. But how would a merger between the two satellite radio giants affect Apple? Well, it could help narrow down which company Apple would buy, if any at all. While Sirius may have a higher market capitalization than XM ($5.8 billion, compared to XM’s $4.6 billion), XM has about 1.6 million more subscribers and more 3rd party radios.

A merger between the two would mean that Apple would no longer need to think about which company it could better profit from. But, a merger could also work badly for Apple. Sirius and XM may not be profitable alone, but together they would be able to dominate the satellite radio market (if the FCC and Congress allow it), causing an increase in overall profit. With newfound money, they may be able to call the shots more and not need a deal with or be bought by Apple to profit. In fact, they might be able to license 3rd party iPod accessory makers to make little iPod-comaptible radio tuners.

So, in the end, a Sirius and XM merger could go both ways for Apple. Of course, whether the two companies will ever actually merge is another question in itself.


4 Comments

Peter said:

Rubbish.

An iPod with satellite radio? XM or Sirius would love this! But how does it benefit Apple? XM & Sirius have 13 million subscribers and claim they increased their subscribers by about 1.4 million people last year. Apple sells that many iPods in one month.

Why does Apple need satellite radio anyway? The whole point of the iPod is "your favorite music", not what some music programmer thinks is/should be your favorite music.

January 12, 2007 2:37 PM
Bregalad said:

I agree that Apple doesn't care about adding any form of radio to the iPod. They went out of their way to make FM difficult with a stupid external gizmo. What Apple forgets is that iPod users don't always want to be completely isolated from the world around them, awash in their "favorite music". Sometimes I want to check a weather or traffic report to find out if my bus is going to be late or want to know the score in a game. Unfortunately that requires radio, AM to be precise, something that just isn't possible with an iPod. You're not going to catch me carrying 3 separate devices so my future looks to be a music enabled cell phone plus a miniature radio. Who knows, maybe someone will put them into a single device to compete against the iPhone.

January 12, 2007 4:14 PM
TowerTone said:

I have a Sirius subscription. I am assuming I could sign in to their web page and listen online with the iPhone just like I can on my desktop. No?

January 12, 2007 8:49 PM
Clair said:

I don't know how it would affect Apple, but a merger between the two satellite radio companies would suck!

January 13, 2007 10:33 AM

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