Up, Down, Up, Down
As reported previously, XM Radio finally launched the first of its satellites, "Rock," in mid-March after frustrating delays, putting it behind rival Sirius in the scramble to get its "birds" in the air. XM's luck is improving, however, as it reports that it completed the successful launch of its companion satellite "Roll" on May 8. XM also says that their "constellation is now complete" since Rock has been formally handed over to the company by Boeing Satellite Systems and has begun broadcasting, while Roll is getting ready to be boosted into its final geostationary orbit. XM adds that it is still planning the service's commercial launch later this summer, while Sirius is shooting for year's end.
XM says that both of its satellites feature two active transponders, each with 16 active (and 6 spare) 228-watt traveling-wave tube amplifiers generating approximately 3000 watts of RF signal power, and claims that they are the "most powerful commercial satellites ever built." XM's investors include General Motors, Honda, Clear Channel Communications, DirecTV and Motient Corporation, and the company has a long-term distribution agreement with General Motors to integrate XM radios into its vehicles commencing in 2001. XM-ready radios are also being manufactured by Sony, Alpine, Pioneer, Clarion, Blaupunkt, Delphi-Delco, Visteon, Panasonic, and Sanyo.
Although it had set its pricing to match that of XM, Sirius has found that its business model and ability to turn a profit were still under heavy fire from analysts. As a result, the company announced last Wednesday that the basic fee it would charge subscribers will rise from $9.95 to $12.95/month, which prompted Sirius' stock price to immeadiately jump 20%.
But the positive momentum from the price-hike announcement was brief as analysts again dog-piled the company. By Friday, Sirius stock had dropped 15% from its high, and the company was facing tough questions after a new report was released in the Wall Street Journal casting a pessimistic eye at the emerging sector. The paper specifically reports that Sirius is still having trouble finalizing its license agreements with Ford and DaimlerChrysler to include satellite-enabled radios in new cars. While GM says XM radios should appear before the end of this year, Ford has indicated that Sirius radios may not be appearing as an option until late in 2002.