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There's a reason Ford (NYSE: F ) CEO Alan Mulally is one of the keynote speakers today at the Consumer Electronics Show. Cars are becoming more than just modes of transportation: They are entertainment stations on wheels.
As long as drivers aren't distracted into fender benders, the evolution of in-dash possibilities will continue to expand, and this year's CES is shaping up as the perfect exposition for consumer tech companies to rev up expectations.
Pioneer jumped the gun yesterday, announcing several new car receivers and navigation units. The headline grabber is the AVIC-X920BT. It's a mouthful, but it's positioning itself as the Swiss Army knife of in-dash gadgetry. It does a little bit of everything, including its integration with Pandora's popular music-streaming application on Apple's (Nasdaq: AAPL ) iPhone. Leaning on the iPhone's 3G connectivity, the gadget fires up the free music discovery site, cranking out personalized play lists through the car's speakers.
The media didn't miss a beat, immediately assuming that Pioneer's success would come at the expense of Sirius XM Radio (Nasdaq: SIRI ) .
- "Internet radio in cars could hit satellite radio hard too," writes The Wall Street Journal.
- "The deal could represent a considerable threat to Sirius XM's satellite radio service," opines PaidContent.org.
- "Pioneer is anxious to expand further into Internet radio with connected devices and to challenge the likes of Sirius XM," goes Mashable's take.
Everyone seems to want Pioneer and Sirius XM in a cage match, but it really isn't much of a fight. I certainly do believe that in-car connectivity is going to be a real challenge for Sirius XM to overcome in the coming years, but there are several reasons why the AVIC-X920BT isn't going to be the one holding the smoking gun over Sirius XM's lifeless body.
Let's go over a few points that seem to be forgotten in the hype.
- This thing costs $1,200, or more than a pair of Sirius or XM receivers with lifetime subscriptions.
- It may be convenient to have a device that automatically detects the Pandora app and fleshes it out on a slick 6.1-inch touch screen, but folks have been able to plug their iPhones into input jacks on a growing number of car models for years.
- The in-dash system is being marketed as Sirius XM ready, so even Pioneer is offering up an olive branch.
- Did I mention that its list price is $1,200?
There will come a time when Sirius XM's livelihood may be threatened, but it's not happening right now. The stock has risen nearly 15% through the first three trading days of the year, fueled by Ford's stellar auto sales in December.
Yes, automakers love satellite radio. Showrooms are unlikely to ever receive financial incentives for pushing free Internet radio. Heck, I'm not sure how Pandora's ad-supported model will work when people have their eyes on the road. However, just as the iPod and iPhone input jacks became standard in many models to give consumers what they wanted, automakers have to eventually give drivers what they want.
Turn the key in the ignition. The entertainment station on wheels needs to run a few errands.
Do you think easier in-car connectivity to Pandora will hurt Sirius XM? Share your thoughts in the comment box below.