SIRIUS READIES NEW CHIPSET, A/V RECEIVERS
Sirius will expand from car to home market by first half of 2003 with branded manufacturers marketing standalone satellite radio decks and A/V receivers containing it as built-in feature, CEO Joseph Clayton told us at Satellite Bcstg. & Communications Assn. show in Las Vegas. Clayton declined to identify which brands might sell new home units, but said it was likely to be mix of new and existing licensees. Among current stable of licensees, Kenwood and Matsushita have presence in A/V receiver market.
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In addition, Sirius may market some products under own brand to fill any holes in distribution strategy, Clayton said. Sirius recently tested own brand of receivers for trucking market, he said. Any receivers sold under Sirius brand probably would be built at Matsushita’s Peachtree, Ga., facility in which Sirius has invested $20 million to help establish production line. Sirius brand product also could be developed for independent distribution, he said. “I want to see how the total landscape of the brands lays out and then if I feel there is a hole in the distribution perhaps I would use the Sirius brand to fill it,” Clayton said. In discussing reasons for Matsushita’s delayed entry into satellite radio market under Sirius brand, Clayton said he wanted guarantee that cost of product would continue to be reduced. Matsushita, which had been expected to have product at Sirius’s national launch in July, will deliver first product in Sept. “They make the best product, but they're not the most cost-effective,” Clayton said, “so I had to have that commitment that they were going to give me that quality product as well as the volume and cost that we need.” About 60,000 units were in retail pipeline at national rollout and Clayton said he remained confident company would end year with 100,000-150,000 subscribers.
Meanwhile, Sirius IC supplier Agere is expected to have production samples of 2nd-generation chipset by 4th quarter that will result in “significant reduction” in manufacturing cost, Clayton said in declining to disclose exact figure. New configuration moves to 4 chips from 8 and cuts power consumption in half, Clayton said. Receivers containing new chipset will ship in first half 2003, although Sirius will continue to make first-generation versions available. Agere is likely remain sole IC supplier until Sirius moves into 3rd- or 4th-generation chipset, at which point it may broaden base as it develops product compatible with rival XM Satellite’s service. XM and Sirius are required by FCC to have cross-compatible product, first of which isn’t likely to emerge for 2-3 years, Clayton said.
On hardware side, Sirius will begin mail-in rebate program Aug. 15 offering $75 off retail price, effectively dropping retail of Kenwood FM modulated unit, for example, to $154 from $229. Rebate program will run through Nov. 17, company said. In OEM market, Daimler-Chrysler is expected to make Sirius radios available as factory-installed option in 17 models starting in fall, with BMW and Ford to follow. Ford is likely make it dealer-installed option, Clayton said. Sirius officials declined to disclose OEM source for auto makers, but Visteon and Delphi are Sirius licensees. Visteon has strong relationship with Ford.