The highly anticipated Sirius XM Radio (NASDAQ:SIRI) streaming program for Apple's (NASDAQ:AAPL) App Store is finally coming.

In news broken by unofficial Apple blog TUAW last night, Sirius XM has been sending out emails to satellite radio fans who have requested information on the upcoming application. The missive claims that the official Sirius XM program for iPhone and Wi-Fi-tethered iPod touch owners will be available tomorrow.

Not so fast, though.

The program won't be freely available for most of Sirius XM's 18.6 million subscribers. Streaming through Apple's devices will be limited to premium Sirius or XM Internet radio subscribers. Those are the accounts without satellite receivers who pay $12.95 a month for Web-only access or satellite subscribers who pay an additional $2.99 a month for premium online playback.

Sirius XM could have taken a page out of the Netflix (NASDAQ:NFLX) playbook, offering its streaming service as a retention bonus for active subscribers. Instead, it's approaching this week's dive into the App Store as a new revenue stream.

This is what makes Sirius XM's foray so important. If it's a winner, it will create a ton of incremental, high-margin revenue for a company that is already in the process of improving its cash flow.

I'm still not convinced. $13 a month may not seem like much, but this is still an inferior product to the similarly priced satellite-beamed product. Due to licensing restrictions, live sporting event broadcasts and some news and entertainment channels are not available online. The App Store program will also hopefully overcome one of the streaming service's biggest quirks: the need to physically confirm that you are listening every 90 minutes or it shuts off.

The $3 a month deal for existing subscribers is an easier sell, but is it worth it? If they are already paying nearly $13 a month for satellite service, it probably means they spend plenty of time with access to satellite receivers that don't require any prolonged buffering between channel changes. Paying for a service implies active usage, and it remains to be seen how quickly this will drain the battery life.

Unfortunately for Sirius XM, the App Store is loaded with free alternatives. Some of the more popular music-related Web radio apps include Slacker, Pandora Radio, and CBS' (NYSE:CBS), with customized playlists based on listener preferences. There are also Internet radio giants like Yahoo!'s (NASDAQ:YHOO) Y! Music, Time Warner's (NYSE:TWX) AOL Music, and even terrestrial radio's Clear Channel, with free ad-supported access to a wide range of genre-specific stations.

They obviously don't have Sirius XM magnets like Howard Stern and Oprah Winfrey on board, but will that be enough to distance the product from the growing realm of free radio?

The answer to that final question will be the difference between shares of Sirius XM ascending further on the back of head-turning financial improvement or languishing as the company sifts for a new catalyst.

What do you think? Will the Apple App Store be a hit or has Sirius XM priced itself out of the market? Post your thoughts in the comment box below.

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