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July 03, 2013

Embedded M2M Solutions - What Role Will Sirius XM Play in Telemantics, Connected Car Market?


Sirius XM is perhaps best known as being the satellite radio home of Howard Stern — but Sirius XM could become a key player in the new direction of connected cars and telematics.

Sirius XM hardware is being found in about two-thirds of the vehicles sold in the United States. Still, it means one-third of the cars don’t have it – a possible roadblock for use of the technology in car-to-car communications, analysts said.


Now, Sirius XM is offering an in-car streaming service and an in-dash access to the Internet Radio App in Ford cars with the Sync AppLink, news reports said.

Ford is the first automaker to launch MySXM and SiriusXM On Demand alongside satellite radio in vehicles, the company said in a statement.

The app support will let subscribers use the Sirius XM Internet radio app on iPhones and Android (News - Alert) handsets.

“This is Sirius’s first full-fledged offering of streaming Internet services in cars,” according to The New York Times.

“The connected car allows us to take our services to a whole other level and expand from a one-way service to an interactive service,” David Frear, Sirius XM’s chief financial officer, told The Times.

In a teleconference, Sirius XM CEO Jim Meyer added, “We hold the strong belief that having satellite connectivity and IP connectivity in vehicles will prove to be a durable advantage versus IP only connectivity as we move into a connected car world. We are already working closely with several OEMs on the development of in-car apps that will provide the initial integration of Sirius XM streaming services.”

“I believe over a mid and long period of time…you will see automakers move to what I will call embedded connectivity that will be LTE (News - Alert) based that will give them lots of options for what they want to do for their customers and their vehicles. I think it's very important that Sirius XM participates in that rollout of technology as it occurs over the next three to seven years and that's exactly what we’re all about when we referred to our connected car strategy…We're moving and reprioritizing a lot of our technical resources and frankly now our commercial programming resources towards making that goal happen as we go out over time.”

“I don't see today one single emerging competitor in the connected car space, I think that today the connected car platform is more of the strategy and I think what's so crucial about it is that I think everybody is looking for a chair at the table right now and I think it’s really important that Sirius XM occupy one of those chairs and so that's where the majority of our effort is going,” he added.

“We're in conversation with automakers about the 2017 and 2018 model year right now,” he continued. “That's how far out these choices are. I can tell you the technology in many cases these auto companies are going to choose is still wide open.”

AT&T and Verizon (News - Alert) – which are partners with Apple and Android OS handsets – may be in a stronger position for two-way communication than Sirius XM, Seeking Alpha predicted.

“Clearly, Sirius XM does not want to be shut out of the connected car space, but just because they have a long-standing relationship with the OEMs would seem to be a relatively weak credential. And, over the next three to five years it would seem to be more of a drain on resources than a growth opportunity for revenue and earnings,” the report added.

“That doesn't mean that Sirius XM's earnings won't be increasing over that time period from the entertainment services it provides or the cost savings that it may generate. It's just that investors probably should not be counting on much contribution to the bottom line from the connected car or telematics before the start of the next decade,” Seeking Alpha said.




Edited by Alisen Downey


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