Iacocca's Jammin' iPod

How ironic: Perhaps the biggest news to emerge over the weekend in consumer electronics wasn't announced at the CES in Las Vegas, but at the North American International Auto Show in Detroit. Yesterday, DaimlerChrysler (NYSE: DCX  ) and Apple Computer (Nasdaq: AAPL  ) announced that iPod integration kits would be made available as an installed option for new Chrysler, Jeep, and Dodge buyers starting in the spring.

Yes, it's bigger news than you're probably thinking. At a base price of $175 plus installation, as many as three million new cars this year may have iPod accessibility through their car stereo systems, complete with steering wheel selection controls and in-dash radio displays.

There are already plenty of people who are tuning in to their iPods as they drive around -- 16 different automakers support the iPod. But this is the first time that an American manufacturer is offering installed kits with seamless iPod integration at the dealership level.

Still not impressed? OK, let's say you walk into your local Chrysler dealer and you're angling for a Sebring convertible. For now, the only way to upgrade your radio listening experience is to pay $195 for a Sirius Satellite Radio (Nasdaq: SIRI  ) and ultimately incur as much as $12.95 in monthly subscription charges. Satellite radio is a great deal, especially with Howard Stern kicking off his five-year contract with Sirius this morning, but now you can opt for a one-time upgrade that will allow you to stream all of the digital music and podcasts that your iPod can stomach.

Satellite radio will be just fine. The early adopter process has moved above and beyond the new car market. Of the nearly 900,000 new subscribers that XM Satellite Radio (Nasdaq: XMSR  ) signed up this past quarter, 85% were in the retail market. The real pain here will be felt by terrestrial radio. The AM and FM music stations with chatty disc jockeys, repetitive play lists, and intrusive ad breaks were already losing ground to the commercial-free satellite radio alternatives. Now they're going to have to compete with the custom-tailored streaming preferences of the iPod user, as well.

Congratulations, Detroit, on landing this significant shift in aural entertainment. Now let's see what else it will take to drive auto sales higher in 2006.

XM Satellite Radio is a recent recommendation of theMotley Fool Rule Breakersnewsletter service.

Longtime Fool contributor Rick Munarriz thinks that an Apple a day will help keep the short sellers away. He does not own shares in any of the companies in this story.The Fool has a disclosure policy. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.

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