It looks like XM came out slightly ahead in this instance. I think it's kind of like Intel and AMD. I think we'll all agree that AMD is the better product but Intel still remains. This is an emerging industry and room for growth is there.
Toyota to offer XM, Sirius radio
by JOHN PORRETTO -- Associated Press posted December 7, 2004
DETROIT (AP) -- Toyota Motor Corp. will offer XM Satellite Radio as a factory-installed option in Toyota and Lexus vehicles beginning in 2006, but customers also will be able to order rival Sirius Satellite Radio at Toyota dealerships starting next year. Sirius shares rose sharply Tuesday, as both companies' stocks headed toward new 52-week highs.
XM, the market leader with roughly 2.5 million subscribers to Sirius' 800,000-plus, already is available as a dealer-installed option on 10 Toyota and Lexus models, and that number will grow in 2005.
Sirius said its equipment will be available as a dealer-installed option on nine Toyota and Lexus models beginning in February.
Wall Street welcomed the deals, even though Sirius and XM already have partnerships with several other automakers. In afternoon trading, Sirius shares soared 88 cents, or 11 percent, to $8.97 on the Nasdaq Stock Market, reaching a new 52-week high. The stock has surged 350 percent from a year ago.
Shares of XM Satellite Radio Holdings Inc. also were poised for a new 52-week high, gaining 73 cents, or 1.9 percent, to $38.46 on the Nasdaq.
XM and Sirius provide commercial-free music and numerous channels of news, traffic, sports and other programming for a monthly fee.
The two money-losing companies are spending heavily in hopes of turning profitable by cultivating the emerging market for satellite-delivered radio, which, unlike local radio stations, can be heard anywhere in the country.
Part of the strategy includes the automotive industry.
Jim Pisz, Toyota's national manager for advanced technologies, said the automaker chose XM as its factory-installed partner because XM meshed better with its plans for additional data services. Without being specific, Pisz said those plans involve using XM's satellite capabilities for other initiatives.
"We feel there was a better alignment with our future goals with XM Radio," he said.
Toyota officials said the automaker has not invested in either satellite-radio provider.
XM has exclusive deals with General Motors Corp. and Honda Motor Co. GM, the world's largest automaker, has backed XM with a $120 million investment and extended an additional $250 million line of credit.
Sirius' partners to date include Ford Motor Co. and DaimlerChrysler AG. Ford said in October it would begin offering Sirius as a dealer-installed option on even more vehicles by year's end and is targeting up to 20 vehicle lines for factory installation for the 2006 and 2007 model years.
Other companies such as Nissan Motor Co. and Volkswagen AG offer both XM and Sirius as options.
Sirius' stock took off in November after the company tapped Mel Karmazin, the former president of media giant Viacom Inc., to be its chief executive. The news came about a month after Sirius sealed a $500 million deal to air shock-jock Howard Stern's radio show beginning in 2006.
For its part, XM in recent months announced an 11-year, $650 million deal with Major League Baseball that will allow XM to carry games from every major league team beginning next year.