Sirius XM: The Limit's the SkyDock

It was refreshing to crack open the Best Buy (NYSE: BBY  ) circular over the weekend and see Sirius XM Radio's (Nasdaq: SIRI  ) new XM SkyDock prominently featured.

Satellite radio receivers are occasionally advertised at the consumer electronics superstore, but it almost seems like an afterthought. The numbers bear out that assumption. As a platform, satellite radio has been fading in popularity at the retail level for quite some time. Its real growth has come from sales of new cars with factory-installed Sirius or XM receivers.

So all things considered, I was more encouraged by yesterday's bullish report out of Ford (NYSE: F  ) than by Sirius XM's press release signaling the SkyDock's nationwide availability.

Is it cool that this thing is now being sold at Apple (Nasdaq: AAPL  ) stores? Yes. You've scored some serious validation points once you work your way into suburban malls' tastemaker chain.

However, I wasn't sold on the SkyDock when it was first unveiled three months ago, and I'm still not changing my tune.

I think it's great that this device uses an iPhone or an iPod touch as a high-end display unit. I can't badmouth the ability for owners to tag songs they hear for purchase through iTunes later. The thing even charges the iPhone, so it's not as if it's a battery hog.

But I'm still betting that the SkyDock doesn't move the needle for Sirius XM. Satellite radio is awesome, but Sirius XM is aiming at a tough crowd here.

iPhone jockeys already pay $20 to $30 extra a month for their unlimited data plans. The smartphones also double as iPods, so music lovers already have them loaded up with tunes of their choosing. Between free Internet radio and digitally-downloaded songs and podcasts, is there really a market here for consumers to pay $13 more for a SkyDock subscription they can only enjoy in the car?

It's true that Apple and AT&T (NYSE: T  ) are meanies when it comes to accessing free Web radio over anything but a stationary Wi-Fi network. That will change the moment that AT&T lives up to the "unlimited" in its data plans, the way it has relented in letting Vonage (Nasdaq: VG  ) and other telephony apps lean on its 3G network for voice chat.

We'll see.

Thursday's conference call will be too early to get a read on SkyDock orders, but the company will finally have a full quarter of Sirius XM's premium app through Apple's App Store to discuss. If the numbers are immaterial, it will be hard to get excited about winning over the Apple crowd with a car-docking station for satellite radio.

Best Buy is a Motley Fool Inside Value recommendation. Apple and Best Buy are Motley Fool Stock Advisor recommendations. The Fool owns shares of Best Buy. Try any of our Foolish newsletter services, free for 30 days.

Longtime Fool contributor Rick Munarriz is a subscriber to both Sirius and XM. He does not own shares in any of the companies in this story. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool's disclosure policy is all ears.


Read/Post Comments (17) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 03, 2009, at 12:00 PM, cantbefoolish wrote:

    SIRI is up a penny. So MF must bash it again with two more negative posts. Can we get the SEC on these guys already?

  • Report this Comment On November 03, 2009, at 12:07 PM, stocknblondes wrote:

    He's not really bashing it per say, the writer just doesn't feel the sky dock will live up to the hype, I happen to disagree..Being sold in Apple retailers across the US is a huge kicker, Apple stores from what I have read have the highest foot traffic per square foot than any retailer outlet in the US, plus I feel there will also be a major national television marketing campaign. This product is the real deal, and will help grow sub counts tremendously in the future. I love it and it works great in my older model Ford work truck.

  • Report this Comment On November 03, 2009, at 1:16 PM, RAF22 wrote:

    For further input about the potential from the Apple Store, go to www.apple.com and click on Store, then scroll down to Staff Picks and see SkyDock featured. When you click on SkyDock you will get all product specs along with user comments, questions and answers. The BEST ANSWER mentioned as follows: "You need to have an XM subscription with the Best of Sirius package ... then download the free app on itunes ... WELL WORTH IT!! This thing is just a fantastic product".

    Any doubts that this will be a big seller via the Apple Store?

  • Report this Comment On November 03, 2009, at 1:17 PM, eddiex wrote:

    Please correct me if I am wrong, but doesn't the SKYDOCK allow one to have Sat. radio in your car anyplace that your I-Phone works??? Perhaps Worldwide?? Now that is a large market!

  • Report this Comment On November 03, 2009, at 1:22 PM, stocknblondes wrote:

    Eddiex, they are currently working on the worldwide scenario, now why else is John Malone buying World Space debt?

    Liberty Satellite Radio LLC is in fact a holding company that Liberty Media owns and has used in the past.

  • Report this Comment On November 03, 2009, at 1:32 PM, JamesRobertDobbs wrote:

    "iPhone jockeys already pay $20 to $30 extra a month for their unlimited data plans."

    Not sure what you mean by "jockeys", but aren't there a lot of people out there with iPhones but without unlimited data plans? People that just have a regular voice plan for the phone, and use WiFi for the apps?

  • Report this Comment On November 03, 2009, at 2:05 PM, jamf92 wrote:

    I agree many will not care about SKYDOCK but I think there is an untapped market that will warm up to this app. Me for one. I just bought an iPhone simply to get the SKYDOCK app. When the economy started to tank and I had a new son coming soon I sold off my Mercedes and paid cash for an older vehicle. Problem is that it only has AM/FM and cassette. I am not into buying tracks so that is not for me and have been a with Sirius almost since they came to market so I missed my SIRI greatly during my 1-2 hour commute.

    Anyway, since I don't have a car payment I have more cash to spend so a little bonus to myself is my XM/Sirius subscription and now the iPhone with SKYDOCK that lets me listen to Sirius in my paid in full clunker! :) I love it and think there are plenty others that are tired of terrestrial radio and are not into iTunes, Rhapsody, etc. I just want to listen to good music with no interruption. I don't care about creating my own playlists, etc. Good call SIRI!

  • Report this Comment On November 03, 2009, at 3:13 PM, BigVincent wrote:

    Rick even if the iphone sky dock has a 1% penetration rate all it does is fight off the existing churn and acquisition costs. This is also a technology where the technology is in the phone, the equipment "docking station" literally cost sirius/xm nothing to make with the antenna, and the dock. The mark up is at over 200%. to what it is actually worth in value.

    People that own IPHONES already pay ridiculous amounts of money to use a data plan you can get 30% cheaper than using any other phone. Iphone users pay almost double for an app that can be offered for the Blackberry storm.

    Iphone owners are the biggest suckers of the bunch, and there will be a group of people wanting this sky dock.

  • Report this Comment On November 03, 2009, at 3:33 PM, GeorgioG wrote:

    1) 18 million paid subscribers

    2) Close to profitability after starting a new company one year ago.

    3) Refinanced debt/Better credit rating now

    4) New and used car markets infiltrated with Sirius

    5) It's a monopoly!!!!!

    6) Most fortunes are made with one company

    7) Mel K is a proven winner.

    8) Mel, Jobs and Malone in your corner...

    9) I know 4 people in a 10 person office that bought the SkyDock so far.

    10) R/S issue is the last hurdle to the finish line

    11) I think Sirius is going to break out of lottery ticket status very soon.

    12) Turning on all old sat radios $$$$ new advertising money

    13) Worldspace possibilities

  • Report this Comment On November 03, 2009, at 4:02 PM, MizzouFanVan wrote:

    I hear you, GeorgioG! Let's hope that 18 million starts ticking upward in the near future. I really don't want the stock to be delisted.

  • Report this Comment On November 03, 2009, at 4:47 PM, tafter wrote:

    JamF92- good times - Terrestrial Radio has more commercials than music now. It's getting old. The regular radio channels seem to have added commercials over the years.

    I like the satellite radio concept, but I do wish Siri XM would offer the top 3 - 5 FM/AM local channels from 4-5 major US cities as their every day line up.

    Does anyone know if Mel has considered that as an option?

  • Report this Comment On November 03, 2009, at 10:37 PM, ThongLover wrote:

    Satellite Saturdays! All month long...or how about the rest of the year to ramp up to Christmas...even make it Satellite Weekends! FREE Satellite on weekends the rest of the year in existing radios...then advertise the hell out of it during the NFL Playoffs, Oprah, SouthPark, 60 minutes...EVERYWHERE! SXM is the best product out there...i agree that Sirius is almost out of the deep water and is ready to step onto the beach running towards the Margarita stand! Let's Party!

    There are SO MANY avenues for this company to take...it's really hard to fathom...besides the fact that they just shot the best Satellite around up into orbit just 1 month ago...they have big plans teamed up with Satellite TV...already in Canada...internet, iphone...i mean come on...also Sirius is slowly getting into businesses....everywhere i go i hear it.

    I've got an iphone and i could care less about Rhapsody and the free internet services...CONTENT IS KING! CNN, CNBC, ESPN, OCTANE, HAIR NATION, LITHIUM...COME ON!!! THE VIRUS, HOWARD...COME ON! Sirius ROCKS!

  • Report this Comment On November 04, 2009, at 12:46 AM, SIRIDoom wrote:

    TRUE REPORTING

    TRUE ARGUMENT

    TRUE CONFLICT

    TRUE STOCK INFORMATION

    This is why I am entering a full complaint against Seeking Alpha. I am a gentleman with opinion on stocks. Are you the same, ladies too?

    Do you want your opinion censored by some bitch with an agenda? No, I think NOT?

    This is what Seeking Alpha has been doing for months. Our question is why Seeking Alpha is so biased to SIRIS? We shall have that answer in a court if needed. They continue to censor all negative opinions of SIRI. Something needs to be done…

    THIS POST IS ABOUT FREE SPEECH. What ever SIRI does is small in comparison…

    To Seeking Alpha, you’re messing with the wrong people and interfering with investigations way over your head. We made every attempt to contact you. You gave us a lawyer contact in Israel.

    Does anyone want to talk to Seeking Alpha Lawyer in Israel?

    David Mirchin, Adv.

    Meitar Liquornik Geva & Leshem Brandwein, Law Offices

    16 Abba Hillel Rd. Ramat Gan 52506, Israel

    Tel - 972-3-6103100 Fax - 972-3-6103667

    Seeking Alpha you have a million dollar lawsuit if you deleted my account or censor one more comment…

  • Report this Comment On November 04, 2009, at 1:14 AM, SIRIDoom wrote:

    Negative SIRIS comments are censored by Seeking Alpha!!!

    Does anyone want to talk to Seeking Alpha Lawyer in Israel?

    David Mirchin, Adv.

    Meitar Liquornik Geva & Leshem Brandwein, Law Offices

    16 Abba Hillel Rd. Ramat Gan 52506, Israel

    Tel - 972-3-6103100 Fax - 972-3-6103667

  • Report this Comment On November 04, 2009, at 9:13 AM, cantbefoolish wrote:

    Hey SIRIDick, calm down. I've had my comments deleted by MF, too. Does that mean they should be sued? No, it means the only place to get real uncensored media, is Sirius XM.

    Although, MF and TSCM should be investigated and fined by the SEC for misleading investors.

  • Report this Comment On November 04, 2009, at 3:29 PM, JWILLI44 wrote:

    I have to agree with some points of this article. I've also said from the start that iphone users are a tough market to try to get !5.00 a month from added to their at&t bill. Well, it's closer to $18.00 becuause most will want to have premium internet also. However, people seem to forget about the ipod touch user. They don't have any thing in their car except their library. SIRIUS XM adds a new world to theiir ipod touch in the car. sports, news, talk, etc...This makes your ipod touch an exceptional portable device. This is where the market for the SKYDOCK will be. Ipod touch....to a much lesser degree iphone. This skydock may also boost the sale of ipod touch 8gb...with access to XM content, many will not need the super big 32gb hard drives and now can feel good with 8gb which is much more affordable to them, because XM gives unlimited content to them. The iphone app, will never bring many new subs on its own, but it will be great for retention and added revenue from existing customers. It is also a homerun for those with the SKYDOCK, it makes your ipod touch/iphone, the only wi-fi capable XM radio on the market....

  • Report this Comment On November 05, 2009, at 11:06 AM, mikebz5 wrote:

    Care to update your expected Sub losses for 2009 Munoz? How about an apology article?

    HAHAHAHHAAAAA!!!!!

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