satellite radio

[MNBoxster]

@cfos,

Hi,

I am making no value judgement whatever re. satellite radio. I think the technology is great. Whatever shortcomings it currently possesses, I'm sure can be dealt with sometime in the future. If it stays alive, I'm sure it'll get better.

What I am saying is that the Marketplace has yet to embrace it. People, whether it's from ignorance, preference for another music medium, economics, or whatever are simply not buying it. I don't have it and am not interested in getting it. When I drive my Porsche, it's usually with no radio at all. When I do listen to something, it's about 99% CDs.

In 2002, Sirius forecast that that they would be meeting cashflow requirements in the 2nd Qtr. of 2003 with 6 million subscibers by the close of 2003. Howard Stern was supposed to bring millions of Loyal followers to Satellite Radio, but apparently they didn't get the word, because few followed.

According to their latest quarterly earnings report released 9/7/05, Sirius listed a $117million Loss for the Qtr., a revised date for reaching positive cashflow to the 4th Qtr. of 2007 and a forecast subcription of 3 million (up from 2.1 million) in 2006. Those are simply not very encouraging numbers or forecasts. (I didn't bother to research XM, but I believe it safe to say that their performance mirrors that of Sirius to a great extent.

The entire system is currently relying on investors who have yet to see a return. If their patience wanes, or if a better investment pops up in the meantime, they dump their stock, meaning Sirius folds up the tent, Game Over.

I know it's attractive to many people. And, I realize these people have become loyal, even avid users. Especially those with special interests such as Sports Fans, or those who regularly drive long distance (to avoid Station Surfing). But apparently, there aren't yet enough of these users to make the whole thing profitable. And, without Profit, you don't have Satellite Radio.

Perhaps as more young people come along, who better embrace the technology, things will improve. If they can last that long.

All new technologies have a birthing period. But, some don't survive beyond it and to date, Satellite Radio just hasn't set the world on fire and the future isn't very clear.

So far as Dealer Options, there are many common ones which don't appear on Porsche's Options List. Porsche doesn't want to offer them, they want to sell them. If, in their opinion (backed by surveys, focus groups, marketing trends and the like) something isn't going to sell, it's unlikely you're gonna see it make the list. So far as other manufacturers carrying them, well for one thing, they are in much greater competition for Market Share than Porsche. Also, their target demographic is both larger and much more broad. For them, it may make sense. It's more than just you wanting it which counts, it has to be that most want it.

I totally agree with you on the GPS thing. I suspect that many buyers don't even use it on a regular basis. But, I equally suspect that it's got the Bling Factor working in it's favor whereas Satellite Radio is seen as just another radio to most buyers (and one you have to pay for, whatever the amount, it's still an added cost for something people are used to getting for free).

One thing is probably true, and that is if Satellite Radio were all the rage, it's a good bet that Porsche would have it in thier lineup, there'd be too much lost profit if it weren't.

But, again, as I've said, we'll have to wait and see what the future brings.

Happy Motoring!...Jim'99