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Satellite Radio Ready to Rock

LAS VEGAS This is the year of digital satellite radio. Barring any unforeseen production problems, Americans soon will hear digital-quality audio from the developers of satellite-delivered DAB – Sirius Satellite Radio and XM Satellite Radio.

(click thumbnail)LAS VEGASThis is the year of digital satellite radio. Barring any unforeseen production problems, Americans soon will hear digital-quality audio from the developers of satellite-delivered DAB – Sirius Satellite Radio and XM Satellite Radio.

Some consumers and electronic retailers heard satellite-digital audio for the first time in the United States at the Consumer Electronics Show in January.

Sirius, XM and their receiver manufacturing partners are talking to retailers about how to market the service to consumers and about product orders of three-band radios to be shipped this summer.

“We believe satellite radio, as a category, will be the fastest-growing auto sound product of all time,” said Sirius’ Tom Steckbeck, Jr., vice president, retail marketing and distribution.

(click thumbnail)XM Satellite Radio President/CEO Hugh Panero shows off some of XM’s prototype head units, receivers and adapters.
Big expectations

“The market opportunity here is huge. Our target audience is the 200 million registered vehicles on the road today,” he said.

Based on analysis from The Yankee Group, Steckbeck said Sirius expects to have 20 million subscribers in 5 years, and that another 20 million will sign up with XM.

Sirius and XM figure that retailers need to sell an average of 12 to 15 percent more units each year to maintain the same dollar value of their annual sales, so they seek products on which they can make more margin.

That’s what Sirius and XM intend to do.

“Retailers can benefit from selling a better type of radio … and they can earn commissions from having those radios activated by a service provider like XM,” said Dan Murphy, XM’s vice president of retail marketing and distribution.

Another satellite company, WorldSpace, is offering satellite-delivered digital radio overseas, but it is targeting home and portable product sales. But because most Americans listen to their radio in the car, XM and Sirius will aim first at the mobile environment.

They plan to offer selling tools such as training seminars, in-store merchandising and promotions for retailers, who can sign up to sell the services through 800 numbers and Web sites for XM, Sirius and their receiver manufacturer partners.

XM recently added Sears to its stable of retail partners and so far plans to merchandise its service in about 2,200 outlets.

Several receiver manufacturers exhibited satellite radio product at the CES show, including Kenwood, Pioneer, Alpine, Clarion, Delphi Delco, Jensen, Blaupunkt, Visteon and Sony.

(click thumbnail)The M/A-COM roof-mounted antenna is one of two antennae Sirius featured on vehicles.
Product in the stores

“We believe satellite radio is going to be an incredibly important consumer accepted format, and we also believe (that) as traditional radio transitions to digital from analog, there’s going to be tremendous consumer acceptance there as well,” said Bob Law, vice president for mobile electronics, Kenwood USA.

Kenwood is developing receivers for Sirius as well as for iBiquity Digital Radio, which hopes to provide a terrestrial digital radio service soon.

Some satellite head units are available now. Manufacturers also took orders from retailers at the show for products that will ship later this year, including more satellite-compatible head units, receivers and adapters. Retail list prices range from about $250 to $1,000, depending on the product configuration.

For about $150 more than analog head unit /receiver/antenna packages, customers would be able to upgrade to the satellite digital service, XM said.

Typically, manufacturers showed satellite-compatible head units and said the “black box,” or receiver, will ship this summer when Sirius and XM begin service. The receiver contains chipsets that can decode the satellite signal; the receiver typically is installed in the trunk or under the passenger seat and hard-wired to both the head unit and the antenna.

Manufacturers showed some satellite-ready models at CES, but plan a more substantial product ramp-up this summer. Pioneer, for example, had three XM-compatible products at the show but plans to offer 21 radio models this summer.

Aftermarket products will be available first. Automakers are targeting the end of this year to offer factory-installed and dealer-installed product, said Tracey Stanyer, vice president, OEM for Sirius.

(click thumbnail)XM’s SVP, Technology, Dr. Stell Patsiokas, holds one of XM’s custom receiver chipsets.

XM has two custom chipsets ready to pass on to receiver manufacturers. S.T. Microelectronics completed first-pass fabrication and initial testing of the silicon chipsets. The baseband signal processor chip and the source decoder chip will be in each XM radio.

Dr. Stell Patsiokas, XM’s senior vice president of technology, said getting the chipset design completed was the last remaining hurdle to having receivers in the market on time this summer. He estimated XM shaved several months of receiver production time by designing its own chipsets, done with 26 XM engineers dedicated to the receiver portion of the technology.

Sirius is using eight chipsets in each receiver initially, but plans to reduce that number later, Stanyer said.

He said Lucent Technologies has completed “first fabrication” of the Sirius chipsets.

Both Sirius and XM believe true chipset integration, so that a customer can buy one receiver that gets both services, won’t occur until 2005 or ’06.

Several antenna choices also were featured at the show.

XM displayed eight antennas for auto, marine and truck use from Terk and Antenna Specialists, as well as its own XM antennas. The products were glass-mounted and roof-and hood-mounted products.

One custom-designed XM antenna system comprises two antennas enclosed in a housing shaped like a shark fin. Patsiokas said the use of a second antenna will make the audio more robust.

Sirius featured antennas shaped like a computer mouse from M/A-COM and RecepTec. The demo automobiles were drilled out so the antennas could be mounted onto them. Sirius also is working with several antenna partners on developing glass-mounted products and eventually hopes to hide the antenna in the car.

Attendees could hear programming examples from each service, in their booths and in demo van rides.

Although both companies have terrestrial repeater systems already built in Las Vegas, Sirius turned off its two repeaters during the show so attendees could hear the Sirius audio, in a mobile environment, directly from its three satellites.

XM demoed 20 channels, originating the audio from its Washington studios, uplinking the signals to a third-party Ku band satellite, and downlinking the audio to its four local terrestrial repeaters.

While Sirius’ satellites are up and being tested, XM has yet to launch a satellite. Boeing scrubbed a January launch when it appeared a measurement was incorrect. March 18 was the new target launch date for the first of XM’s two satellites.