Will Ford Run Sirius XM Off the Road?

Ford (NYSE: F  ) is rolling out new radio and online connectivity gadgets next year, and it could get in the way of Sirius XM Radio's (Nasdaq: SIRI  ) plans for Mad Max-esque roadway domination.

It's probably telling that Ford CEO Alan Mulally is delivering the opening keynote speech at next week's Consumer Electronics Show. The automaker is beefing up the in-car entertainment experience, and Mulally will have the ears of industry tastemakers in nine days as he dreams out loud.

Ford announced yesterday that it will be the first car manufacturer to offer HD radio technology with iTunes Tagging next year. In other words, folks will be able to push a button on the in-dash receiver to remember songs. The next time the owner plugs in an iPod or iPhone, those songs can be purchased through Apple's (Nasdaq: AAPL  ) digital storefront.

This may not seem like much of a threat to Sirius XM, at first. HD Radio has been around for years without making much of a dent in satellite radio's success. However, the ability to improve on the sound of analog radio -- while offering deeper genre dives with fewer commercials through multicasting -- does improve the profile of terrestrial dinosaurs that many of us have left for dead.

However, perhaps the most nail-biting aspect of Ford's beefing up its dashboard options is that it's turning this into more than just a battle between satellite and conventional radio options.

"In 2010, Ford vehicles will offer familiar terrestrial radio, HD Radio technology, Sirius Satellite Radio as well as Internet radio through Ford SYNC from a Bluetooth-streaming audio-capable smartphone," reads the release.

The unlikely pairing of Ford and Microsoft (Nasdaq: MSFT  ) to introduce SYNC is already more than two years old. Sirius XM is more popular today than it was when SYNC began rolling out in 2008 model cars, so savvy music-munching hard drives haven't been fatal.

However, what has also grown in that time is the smartphone market, as Apple, Research In Motion (Nasdaq: RIMM  ) , and Palm (Nasdaq: PALM  ) revolutionize the capabilities of what a wireless handset can do.

The potent argument in satellite radio's defense has been that Sirius XM can offer automakers recurring financial incentives that an iPod input jack cannot. However, now that Ford is taking a page out of Apple's playbook by opening up Sync apps to the developer community, it will be making a push to market lucrative in-car 3G Wi-Fi connectivity options next year.

This does not mean that Sirius XM is toast. It has come too far -- and accomplished so much -- to falter at the first glimpse of disruptive in-car technology. However, it will soon have to address Internet streams and HD Radio as roadway competitors. It's no longer sparring exclusively with FM and AM radio.

See you at Thunderdome, road warriors.

What do you see as the biggest threat for Sirius XM? Share your thoughts in the comment box below.

Apple is a Motley Fool Stock Advisor recommendation. Microsoft is a Motley Fool Inside Value selection. Motley Fool Options has recommended a diagonal call strategy on Microsoft. 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 stocks in this article. He is also a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its defiance. The Fool has a disclosure policy.


Read/Post Comments (31) | Recommend This Article (18)

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 December 29, 2009, at 1:11 PM, Fool wrote:

    "DEAD AIR: Radio?s Great Leap Forward stalling in the Valley"

    "Nearly two years after the Valley?s four Clear Channel stations went HD, several high-end car manufacturers have promised to offer HD radios as an option on new models. But while Ford announced in September that it offers the radios as dealer-installed upgrades ? as have Mini, Volvo, Jaguar and BMW ? local Ford and Lincoln dealers had not heard of HD and said they don?t offer the option."

    http://tinyurl.com/6gwdj4

    As an investor in iBiquity, Ford was supposed to be adding HD Radio starting back in 2007, but it never materialized. Of course, analog FM also has iTunes tagging. HD Radio is a farce! http://hdradiofarce.blogspot.com

  • Report this Comment On December 29, 2009, at 1:12 PM, 1crazyhorse wrote:

    What is this some penny stock rag mullet wrapper. This is the second article today regarding a .60 cent stock. WTF. What is your motive here. Certainly there are more noteworthy equities to write about or is you intent to run off investors or potential investors. It seems obvious to average reader. You are losing credibility by the hour. Very unprofessional I might ad

  • Report this Comment On December 29, 2009, at 1:38 PM, Fredlee009 wrote:

    The biggest threat to sat. radio is the economy. As long as they run out 12 million plus cars next year, based on current metrics, sirius is guaranteed to add subs. This business model generates 2.5 billion dollars a year in revenue. Nothing can stop a superior product, with superior delivery except themselves, and so far management is doing everything right. A threat to their sp is dumb articles written by you. A closet sirius basher for a long time now, you dont fool anyone. This will have no affect on sirius this year, or next. Mabye if the wifi improves, or opens more bandwidth, plus the huge fees for internet streaming. Not worth it to most people. Just wait for the new charges coming to stem internet use on wifi.

  • Report this Comment On December 29, 2009, at 1:39 PM, cycle63 wrote:

    Another anti Sirius piece, gee this is amazing. Terrestrial radio is nothing when compared to Sirius. All you have to do is listen to the two. Regular radio is awful!!

    This article, like so many others, appears to be a ploy to drive down the price so you can cover your shorts. Just wait until the 4th quarter results are released.

  • Report this Comment On December 29, 2009, at 1:39 PM, Fredlee009 wrote:

    Dumbest article ive read in months. by far.

    Someone who really doesnt get it.

  • Report this Comment On December 29, 2009, at 2:26 PM, esteemxxxx wrote:

    HD radio and SYNC technology is not a threat to Sirius XM radio it's just another form of radio. It's a technology in WHICH already has forseen in the past by the CEO of SiriusXM. It's also another opportunity for SiriusXM to capitalize on. There are always ways, for those creative, to capitalize on emerging technology.

  • Report this Comment On December 29, 2009, at 3:20 PM, Fredlee009 wrote:

    Will Rick M. ever write an article for anything but hits? Thats what this article should be titled....

    Junk journalism....

  • Report this Comment On December 29, 2009, at 4:23 PM, BillinNC wrote:

    What ever happened to Sirrius/XM Television?

  • Report this Comment On December 29, 2009, at 5:26 PM, JPS007 wrote:

    This article totally misses. No one cares about the technology. Does a Consumer really care about Sirius vs HD. NO. They care about content, not the delivery mechanism. HD content sucks. The only difference between FM and HD is the quality of the comercials!

    Sirius XM wins this battle hands down because of their excellent content!

  • Report this Comment On December 29, 2009, at 8:02 PM, FM5 wrote:

    Let's see SirriusXm is in Bed with Apple Already one of the hottest companies right now and staying for a long time, & has the push button buy me now with sky dock with the i phone, they're in bed with all the major car companies & i mean all, thay have 6 satellites Rockets they launched in orbit, & no one wants a wifi bill for their car, they have one at home already, plus the cell phone they pay to take to work all day, and who's to say that if Sirrius that has 3 TV channels in a Car going down the Rode at 120 Mph right now coming in clear with a 5 inch antenna on a 2 inch mounting bracket no bigger then a suction cup, that can be stuck to anyone's household window, to soon someday work a deal to get 75 to100 more TV channels, who needs a cable company? This company may just be your next comcast / or TV provider, with no cable and no big dish bolted to your house, jest a 5 inch antenna with a suction cup to the window and a little 4 x 4 inch Box you plug into your wall outlet. Anyone selling this stock need to check themselves into Yale medical hospital.

  • Report this Comment On December 29, 2009, at 9:20 PM, tootun wrote:

    I was going to comment but you guys put this dip in his place. His words tell a story and that story is he is either shorting Siri or he lost his $2,000.00 investment a couple of years ago. These Siri haters are a dime a dozen. You will not stop Siri from taking over all media outlets guys just give up ok?

  • Report this Comment On December 29, 2009, at 11:53 PM, PeteC888 wrote:

    Some day when we can get internet almost everywhere that we drive and most of us are willing to pay for internet connectivity on our phones, it will actually be good for Sirius XM investors. Sirius XM can stop paying for satellites and just offer their content over internet for a whole lot less money per subscription because they don't have to pay for satellites. Then, almost everyone will pay for Sirius XM just like almost everyone still pays for an am/fm radio in their cars even though they still buy CDs and iPods. Even though there will be a little competition from "free internet radio stations" those stations will not be able to afford the talent that Sirius XM already has built up. Most "free internet radio sights" will also play annoying commercials or be forced to charge too much to cover the royalty fees that Sirius XM is already paying. I have tried, some of those "free radio sights” and they are playing more and more commercials. I like the iPods, but sometimes I don't want to listen to what I already have stored and I don't want to download new music. I just want to turn on Sirius XM and let their professional DJs play great commercial free selections for me without me having to do anything else.

  • Report this Comment On December 30, 2009, at 12:54 AM, BobMichigan wrote:

    All I know about sirius XM is I have had it for a couple of months now. On 2 long trips I could tell you what the next song was after a couple of hours. I switched to my Ipod on shuffle after a while. Will I sign up again when it expires? No.

  • Report this Comment On December 30, 2009, at 3:50 AM, mlrinc10 wrote:

    Hey BobMichigan.....if you only listen to one channel then you are right, you don't need satellite radio.

  • Report this Comment On December 30, 2009, at 3:51 AM, mlrinc10 wrote:

    and keep on changing/searching those channels about every thirty minutes on a long trip........

    happy motoring.

  • Report this Comment On December 30, 2009, at 5:40 AM, Br0oklyn wrote:

    I own x amount of shares in SIRI. What's wrong with holding on to a penny share? Its as same as investing in blue chip or anyother investment. My hint is its just a risk in which everybody takes. I strongly believe that this company has the potiental to make outstanding profits. 2/3 of Benz alright come with siri. Isn't that a positive look?

  • Report this Comment On December 30, 2009, at 6:07 AM, Thomass22 wrote:

    HD radio should change thier name to Static Radio, because those HD stations can't seem to hold a clear signal for very long. So if static is what you're lookn for, than HD is the way to go,but, if you want incredible content than SiriusXM is the way to go.

  • Report this Comment On December 30, 2009, at 9:17 AM, JoBu55 wrote:

    To answer your question, NO. SIri gives users the option to listen to new content all day, by genre, which exposes us to new options to download to our collections (on any device) as we please through whatever service we please.

    In a car, that works just fine, thanks. I will never revert to terrestrial radio, all that stupid talk is useless!

    Siri works wherever I drive!

  • Report this Comment On December 30, 2009, at 10:17 AM, BuffettIII wrote:

    Mr. Rick

    HD Radio radio poses about the same threat to satellite radio as HD TV poses to Direct TV.

    At the end of the day, they will probably both field complementary line ups that co-exist in some form for many years.

    The fact that IPOD jacks have now appeared is not any more surprising than the fact that CD jacks first appeared in the late 80s and early 90s.

    Ultimately there will be a musical synthesis. Every available music format will be offered in both the vehicle and the home. Then the older ones will eventually be phased out. When is the last time you jammed to a cassette tape for example?

    What is changing is the internet is undermining the ad-based revenue model across the board. That and that alone is the difference between then and now. Have you noticed the Post Office is going broke? Advertisers prefer mass e-mail and web banners these days.

    Ultimately the consumer benefits from all this competition. At least, that is how it is supposed to work.

    Buffett III

  • Report this Comment On December 30, 2009, at 10:41 AM, circleight wrote:

    I guess I think of Sirius XM as a content provider. The SYNC is just another delivery option that Sirius can be a part of (its internet feed). It also still sounds as though the cars will come equipped with Satellite Radio as they always have. ...Don't think this is really anything to fret about.

  • Report this Comment On December 30, 2009, at 12:09 PM, biagini2 wrote:

    Nothing can compare with Sirius XM content. Music, News, Comedy, Weather, Traffic, Talk Radio, Oprah, Martha, Fox and Howard Stern for a measly $18.01 a month. Now that's value!

  • Report this Comment On December 30, 2009, at 12:43 PM, mrevspara1 wrote:

    dec. 29 Rick writes an article extolling the virtues of sirius. his concluding paragraph says,"With just a few trading days left in 2009, shares of Sirius XM have appreciated fivefold. Even DirecTV (NYSE: DTV), Netflix (Nasdaq: NFLX), and other subscriber-based entertainment services that consistently grew their user bases during the recession can't claim those lofty gains. Sirius XM survived -- and then thrived -- in 2009. Now it's on to the open-ended potential of 2010.

    here he writes a fairly gloomy article. should we believe either article?

  • Report this Comment On December 30, 2009, at 1:43 PM, dubyaisafairy wrote:

    the author of this article fails to mention (or realize) that internet connectivity via satellite is the wave of the future. xm will dominate this market. smartphones will only increase market share for xm in the long run.

  • Report this Comment On December 30, 2009, at 2:50 PM, FM5 wrote:

    That's Right without a satellites cell towers are useless, Remember it all comes from the top

  • Report this Comment On December 30, 2009, at 2:59 PM, Fool wrote:

    HD Radio has worse signal reception that traditional radio. I don't see anyone finding this better than Sirius XM.

  • Report this Comment On December 31, 2009, at 2:14 AM, diggerjj wrote:

    AND ANOTHER THING!

    you can recieve the Sirius signal all the way south in Cancun Mexico.

    Sirius, South America could be your next expansion.

    Here's to our future $$$$$$$$$$$$$

    Gentle men, see you at the bank

  • Report this Comment On December 31, 2009, at 6:23 AM, kikbuti wrote:

    I can't get behind companies that thumb their noses at their consumers. Certainly, satellite radio provides better content with less commercials. However, they have alienated a large portion of their audience with programming choices and price increases. In case many of you don't know, they are bolstering their reported subscription numbers by offering subscriptions at less than half price to former subscribers.

    Short term success by screwing the consumer will come back to bite you in the end. I commute on public transportation and used to listen on MyFi XM2Go. I dumped SiriusXM. Now I stream the radio content I desire on my iPhone.

  • Report this Comment On December 31, 2009, at 1:21 PM, plange01 wrote:

    as the US enters its second year in a depression sirius which should have been delisted 8 months ago will fail.ford has about a 10% chance of making it to 2011...

  • Report this Comment On December 31, 2009, at 8:20 PM, IAM215 wrote:

    Many great points made by all, thanks for the perspectives! Funny that I don't even have Sirius XM in my car, but I own the shares and actually may buy a lot more if Rick keeps going. The comments about the delivery mode and trends (by BuffetIII) are right on. Concerned that there is some looping of content... I don't like that on my Cable channels so obviously I need to join to see for myself. I have a G1 phone and I believe that will support Sirius soon (anyone know for sure?). Don't want to dedicate to one car, need this on a personal device - I believe in 1 stop shopping (and billing). Oh... buy the way, Happy New Year (somewhere in the world)! Back to my Scotch and maybe talk soon.

    21

  • Report this Comment On January 04, 2010, at 8:47 PM, PSU69 wrote:

    I had Siri retrofitted in my Porsche. I love it. Sports. Music. No commercials. They made it thru the valley of darkness (OEM volume drop). the stock will continue to recover. Keep the faith. As far as negativity from MF writers, provoking discussion is not all bad. I own and keep buying SIRI.

  • Report this Comment On January 06, 2010, at 12:02 AM, akeagle52 wrote:

    I have had the Sirius XM service for over three years now. The biggest frustration is interruption of service. We took a road trip from Florida to Alaska. Most of the time the reception was great, but when we got into a city with tall buildings or when we drove through the Rockies we would lose reception. Most of the time we would get frustrated and turn the thing off, or we would listen to am/fm or a CD. I own SIRI and it has been positive for me. We get fair reception in Alaska. One thing about technology, it waits for nothing or no one. The eight-track, VHS, and many others are proof of that. If SIRI continues to advance it's technology it could be a multi bagger. We'll watch close and see what happens.

Add your comment.

DocumentId: 1074572, ~/Articles/ArticleHandler.aspx, 7/29/2014 5:45:35 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement