In an effort to make its audio entertainment offerings more attractive, General Motors (NYSE:GM) will be slashing the price on its XM Satellite Radio (NASDAQ:XMSR) receivers by 39% -- from $325 to $199 -- beginning with most of its 2007 models.

The timing is great for XM. Even though its battle with Sirius (NASDAQ:SIRI) to gain new subscribers has moved beyond the showroom and into the more competitive aftermarket realm of consumer electronics retailing, it's good to see XM become a more attractive option in the factory-installed space. Recent production holdups on popular portable units have materialized after the FCC discovered that some of the car-radio transmitters were bleeding into the radio dials of nearby drivers.

Automaker-installed systems aren't as attractive as retail purchases, because some car owners don't bother to activate their satellite radio systems or extend their subscriptions after their free trials run out. You also have the limited life expectancy of car ownership. Yes, GM has installed four million XM receivers over the past few years, but way too many of those are likely inactive. However, one can't deny the attractiveness of automobile systems as a way to introduce the platform to new-car buyers -- and anyone else who hops into the car with them.

An important note here is that GM claims that it is cutting receiver prices as a result of "economies of scale and engineering efficiencies." It happens with all technogadgetry. That $500 entry-level DVD player back during the turn of the century is now selling for $40. Satellite radio receivers will get continue to get cheaper, which will serve XM and Sirius well; their current massive losses stem partly from the generous rebates they're offering to subsidize receiver purchases. It's even worse overseas, where WorldSpace (NASDAQ:WRSP) was giving away its receivers for free to buyers willing to pay for a few months of service in advance.

XM and Sirius haven't been getting a whole lot of love down Wall Street. Both stocks have fallen precipitously since they peaked during the 2004 holiday season. That has made XM a disappointing Rule Breakers newsletter recommendation to boot, so any good news is welcome news. GM's price reduction may usher in a wave of more affordable hardware that XM or Sirius won't have to subsidize, which would do wonders to their income statements.

Come back tomorrow, when Rick and Adrian Rush will tackle the bull and bear side of investing in XM in our weekly Dueling Fools feature. If you'd like more info on XM, learn why Rick chose it as a Motley Fool Rule Breakers pick with a free 30-day trial subscription.

Longtime Fool contributor Rick Munarriz is a Sirius and XM subscriber. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. T he Fool has a disclosure policy.