Sirius XM May Have a Problem With GM

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

General Motors (NYSE: GM  ) and Sirius XM Radio (NASDAQ: SIRI  ) have been symbiotic partners in the past, but there are two reasons to believe that the two companies may not have an equally harmonious future.

We can start with telematics, where GM's OnStar is the undisputed market champ.

Sirius XM announced a partnership with Nissan (NASDAQOTH: NSANY  ) to offer premium telematics in Nissan cars last year, and Sirius XM's presence in this promising niche expanded dramatically with last week's $530 million deal for Agero's connective vehicle services business.

Now GM may be fighting back in a less direct manner.

The CEO of Powermat Technologies -- a leading maker of wireless charging systems for smartphones -- revealed yesterday that GM will start offering its charging mats in some cars next year.

You've probably seen the Powermat chargers at a consumer electronics store. You may even own one. It's not a universal solution. The phones have to offer wireless recharging, but there's also a special case that can be used for phones that don't offer that feature.

How is this a threat to Sirius XM? Well, think about it. Some of the common knocks against streaming Pandora (NYSE: P  ) or Spotify through dashboard audio systems in lieu of satellite radio are metered data plans, inconsistent connectivity, and sapping a phone's battery dry.

There's nothing that GM cars with Powermat chargers can do about bandwidth or carrier reception concerns, but depleting a car's battery by streaming a cloud-based music service won't be an issue.

Yes, one can argue that many newer model cars offer USB charging ports already. However, there's something to be said about the convenience of resting a phone on a mat for juice without having to do a thing.

Now, in Sirius XM's defense, GM has far more to gain by working with the premium radio service than against it. GM was an early investor in Sirius XM, and it collects a healthy royalty for every active GM driver on the service. The move to offer wireless smartphone and tablet charging is about selling more cars, establishing GM on the cutting edge of mobile technology. It's not being positioned as a shot at Sirius XM.

However, won't this help Pandora? If you have wireless charging, drivers will use it, making the most of apps that they can run seamlessly from their car controls.

GM and Sirius XM will continue to benefit one another, but investors have to realize that they're starting to see other people.

Driving abroad
There's good reason to believe that the most successful investors over the next few decades will be those with exposure to China's massive and growing population of domestic consumers. And there are few things that these consumers are likely to purchase with more enthusiasm than cars and trucks. In this brand-new free report, our analysts get out in front of this trend by identifying two automakers that are poised to surge along with China's middle class. If you want to be among the smart investors who get rich from this growing trend, then you'd be well advised to instantly download our free report on the topic by clicking here now.

Read/Post Comments (10) | Recommend This Article (1)

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 August 20, 2013, at 5:59 PM, Sultanhigh wrote:

    Seems a reach. And headline is very misleading.

  • Report this Comment On August 20, 2013, at 6:01 PM, rblazer75 wrote:

    Isn't this a bit of a stretch? The big issue with phones is the data charge not the batteries, as you said yourself "Yes, one can argue that many newer model cars offer USB charging ports already. However, there's something to be said about the convenience of resting a phone on a mat for juice without having to do a thing." It is sooooo hard to plug your phone in before you start driving...Also wouldn't this be more of concern for whoever is making those usb ports than siri ?

  • Report this Comment On August 20, 2013, at 8:50 PM, CaribouPaku wrote:


  • Report this Comment On August 20, 2013, at 9:31 PM, jazzopie wrote:

    Coca Cola is going to have a problem with GM because they made their cup holder to small to hold a can of soda...

  • Report this Comment On August 20, 2013, at 9:44 PM, 67vair wrote:

    Ooooh, another voodoo article about Sirius. That was 2 minutes of my life I'll never get back.

  • Report this Comment On August 20, 2013, at 11:12 PM, Austin77478 wrote:

    Rick, Are you running out of ideas? Not your best article!

  • Report this Comment On August 21, 2013, at 8:11 AM, indycolt17 wrote:

    If this 'charging mat' provides a free alternative to NFL Network Radio....then Sirius "may have a problem".

  • Report this Comment On August 21, 2013, at 9:27 AM, JamesRobertDobbs wrote:

    "I think I'll subscribe to Sirius instead of Pandora because I don't like having to use a charging cable in my car.

    Oh, I don't have to use a charging cable? I'm definitely going to Pandora!"


  • Report this Comment On August 21, 2013, at 12:56 PM, tigerjohnni wrote:

    Um you do realize that sirius and gm agreed on a new contract for subs starting end of year and will be better for bottom line of siriusxm, if anything sirius just won't provide to gm what onstar does. Other than that they have a great relationship.

  • Report this Comment On August 22, 2013, at 3:46 PM, iblonginob wrote:

    Ludicrous rationale. I expect better than this Rick. Figured you might touch on the SXM sub deal with GM and how it might be tainted by the SXM deal for the telematics co. I mean, OnStar is a huge part of GM, and should be a little bent out of shape, right?

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2603081, ~/Articles/ArticleHandler.aspx, 9/29/2016 6:46:55 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...

Today's Market

updated 8 hours ago Sponsored by:
DOW 18,339.24 110.94 0.61%
S&P 500 2,171.37 11.44 0.53%
NASD 5,318.55 12.84 0.24%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/28/2016 4:00 PM
GM $31.90 Up +0.30 +0.95%
General Motors CAPS Rating: ***
SIRI $4.17 Up +0.01 +0.12%
Sirius XM Radio CAPS Rating: **
NSANY $20.00 Down -0.06 -0.30%
Nissan Motor CAPS Rating: ****
P $14.41 Up +0.27 +1.91%
Pandora Media CAPS Rating: **