In a note today, Citigroup analyst Tony Wible notes that an app could be on the way that brings Sirius content to Apple’s iPhone.
Wible is excited about the idea. “While Apple is generally perceived as a competitor to satellite radio, the streaming application underscores that it may complement and help satellite radio,” Wible says. He notes that the new application would:
- Eliminate Sirius’s costs of physical radios.
- Help attract new subscribers at a lower cost (though with a higher royalty rate for Internet streaming vs. satellite streaming).
- Likely improve the ability for Sirius subscribers to purchase tracks from Apple’s iTunes store.
Sounds nice, but we don’t think it’s a big deal. Why not?
- The iPhone — and any mobile phone — is hardly an ideal device for listening to the radio in your car, where Sirius shines. After you figure out how to hook it up to your car stereo system, relying on AT&T’s mobile phone network signal to reliably deliver an uninterrupted audio stream could be a losing proposition.
- Besides Howard Stern, there’s not much unique Sirius content worth paying for to listen to on your iPhone that you can’t get from other radio sources. An 80s station is an 80s station, no matter the source.
- There’s plenty of other ways to listen to music on the iPhone that don’t require a subscription fee, including its built-in library, and free apps from Pandora, Last.fm, AOL/CBS radio, etc.
- mobile phone owners have been able to stream satellite radio content for years, and that hasn’t done much for Sirius or its former rival XM.
Would an iPhone app get Sirius subscribers to use the service more? Perhaps. Is it going to convince more people to sign up for the service itself? We don’t see how.
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