The saying "All good things come to those who wait" must have come about with the meteoric rise of XM Satellite Radio
XM and fellow satellite provider Sirius Satellite Radio
XM, the leading satellite radio provider, has been so busy lately that you need a scorecard and a sharp pencil just to keep track of the various players. It recently signed an exclusive multiyear contract with Starbucks
To say that XM is not taking the conventional route to add subscribers would be an understatement. More than 50% of the company's 418,449 new subscribers in the second quarter came from the new car market. Companies such as General Motors
Looking ahead, the company has upped its projection for 2004 year-end subscriber numbers to 3.1 million from 2.8 million as a result of tremendous demand in both the new-car and retail markets. Perhaps the most interesting comparison in the company's second-quarter results was XM's 37% improvement in the cost per gross subscriber addition, which was $160 last year and is now $101. Yes, the company is still losing money at the bottom line (an $0.84 per-share loss in the second quarter vs. a $1.38 loss a year ago), but it is definitely becoming much more cost-efficient. The company deserves further consideration, in my opinion, based on its superior product strategy, attractive long-term growth prospects, and improving financial results.
Want to check out our duel on XM and Sirius, with two writers battling it out over the upstarts?
Fool contributor Phil Wohl spent more than 12 years on Wall Street and now concentrates his writing on more fictional characters. He has no stake in any firm mentioned above.