Rival to MP3 gadgets
Just as the iPod and other portable devices that hold songs copied from CDs or downloaded from the Web begin to evolve with new functions such as photo storage, along comes a gadget that plays and records material from satellite radio.
XM Satellite Radio Holdings recently unveiled its wearable Delphi XM MyFi to differentiate itself from rival Sirius Satellite Radio and to lure users to a medium previously confined to the home and the car.
Although some experts are skeptical, others say they believe the palm-size MyFi, which weighs just seven ounces, could shake up the market for portable music players.
“For people who want to aggressively find, download and own music and spend a lot of time doing that, iPods, Rios and the others are interesting devices to them,” said XM chief executive officer Hugh Panero.
“Ours is more of a mass-market product for people who want to drink from the fountain of entertainment… rather than spend all that time searching and downloading,” he said.
The MyFi costs $350, in addition to XM’s $9.99 monthly fee for more than 130 channels of programming. It can run for five hours on a rechargeable battery and uses an antenna inside its case to draw down the satellite signals.
XM’s partner, radio-maker Delphi Corp., said at MyFi’s launch late last month that the device was the next big thing in consumer electronics, with the potential impact of the transistor radio and portable CD player.
Some analysts agreed.
“If it works, the XM Radio portable is a much bigger deal than the latest iPods,” said Jupiter Research analyst David Card. “Think about it, just about everybody listens to radio, while only about 60 percent of the U.S. buys any music at all.”
The MyFi has a “memory mode” to store and replay up to five hours of XM content. Users can record programs on the spot or set up a timed recording of a show in advance. As with the iPod and other players, users can search stored content by artist or song title.
Apple Computer Inc., maker of the iPod, declined to comment on the MyFi, but Greg Woock, chief executive of Virgin Electronics, sees it as a competitor to his company’s new five-gigabyte MP3 player and digital music service.
Satellite radio is still unproven, Woock said, but the MyFi is a rival for both “device dollars and subscription dollars.”
Panero said he believed that, one day, a satellite radio portable player could be combined with a device like an iPod.
“Clearly, there is the potential to evolve into a purchasing environment where we can help people acquire the content,” he said.
XM is on track to reach 3.1 million subscribers by the end of the year, said Janco Partners analyst April Horace, who said he believed MyFi would drive subscription growth.
Interest in satellite has heated up recently with Sirius’ $500 million broadcast deal for Howard Stern and XM’s $650 million contract with Major-League Baseball.
But some industry-watchers say XM and Sirius are burning too much cash.
“A portable device is a huge breakthrough, but I question if it’s the right time,” said Peter Fader, a marketing professor at the Wharton School, who said he believed XM should build up its audience before launching mass-market products.
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