What's good for Ford
Sync will allow drivers to plug in their portable music players to their cars. That itself isn't new. More and more cars are hopping on the Apple
It's more than just about audio entertainment. Sync's got Bluetooth functionality and will be able to work some pretty convenient magic like read out incoming text messages on enabled smart phones and PDAs. However, its ability to customize accumulated music -- whether it's through a portable music player or even residing in a USB flash drive -- will be a challenge for Sirius, and eventually XM
Yes, XM and Sirius have been able to grow despite the wider adoption rate of the iPod. Satellite radio provides fresh content and the chance to discover new music, while iPods simply replay what you already have, along with any podcasts you have downloaded. The rub here is that car buyers who decide to invest in a Sync may be hard-pressed to justify tacking on a satellite radio subscription service for nearly $13 a month. This isn't the kind of device that will simply open up the appetite for more in-dash entertainment. There are a limited number of drivers out there who spend enough time in their cars to justify either a Sync or a satellite account.
Sirius and XM need the car market to work. They have been struggling collectively at the retail level since August. Each company also signed up fewer net subscribers in the fourth quarter than it did a year earlier.
It's ironic. Sirius and Microsoft have already teamed up for a software and content solution to begin streaming video content into backseat car monitors. Now it seems as if Microsoft's latest toy may come at the expense of its partner. More importantly, take a look at Microsoft! Between the Sync and its media playing software solutions, the company is thinking outside of the box and getting into your car.
Rick recommended XM to Rule Breakers subscribers last year, but the position has since been liquidated. If you want to know why, dive into a 30-day free trial to read all about the decision-making process. Microsoft is an Inside Value selection.
Longtime Fool contributor Rick Munarriz is a Sirius and XM subscriber, but he does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.