The Day We’ve Been Waiting For: Sirius XM & Apple
June 17th, 2009
The day will be June 18, 2009. That is the rumored day of the release of the Sirius XM iPhone Application. In a turnaround of monumental proportions, the struggling satellite radio company that nearly ended up in bankruptcy a few months back will now be streaming music to millions of iPhones worldwide. Predictions for numbers of iPhones to sell in 2009 range from 10 to 45 million. Sirius XM Radio currently has an estimated 19 million subscribers, and has just begun to close the profitability gap after one of the longest corporate mergers in recent history.
So what does all this mean for Sirius XM Radio (SIRI) investors? The common shares of the company have been under siege for most of this past year, and now retail investors will likely realize some actual returns on their investments. All this despite widespread short-selling amidst the company’s billions of outstanding shares.
The potential revenue yield from this shift in ideology for Sirius XM Radio toward smart phones and wi-fi as a whole is daunting. We’ve already seen increased returns from merger synergies, and efficiency at Sirius XM Radio has been improving weekly if not daily. Throw in a way to easily double it’s subscriber base – and you can quickly see how this casts a serious ray of hope on chances to begin knocking down outstanding debt.
From a user’s perspective – the world’s addiction to Apple’s Iphones and Ipod Touch are now paired with the best commercial-free radio content available. Howard Stern, easily the company’s bread winner, will now be able to reach listeners worldwide at the touch of a screen.
Ponder this thought: Who says they will stop with the iPhone? Many investors may already have forgotten that the last shareholders meeting mentioned “The iPhone and other Smart Phones.” I can only think this will be a serious blow to the terrestrial radio industry.
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