XM Satellite Radio Lowers Subscriber Guidance
May 24, 2006
Satellite Standard Group keeps you informed. Today XM Satellite Radio lowered 2006 subscriber guidance from 9,000,000 to 8,500,000.
"Although XM has regained retail market share since the first of the year, the satellite radio category has seen an overall softness at retail during the second quarter to date, and we have been later than anticipated with broad availability of our new products," XM chief executive Hugh Panero said in a statement.
WHAT DOES THIS MEAN?Panero's citing of gaining retail share is partially correct. Retail share favored Sirius greatly in January when Howard Stern launched. By nature, the effect of Stern would wane to a certain extent following the launch. Through April this year, Sirius has garnered 59% of the NPD retail share, and this is likely something that XM was not anticipating.IMPACT ON THE SECTORSirius raised their subscriber guidance from 6,000,000 to 6,200,000 a few weeks ago. Now XM has lowered guidance from 9,000,000 to 8,500,000. Should these companies reach their goals, it would mean that Sirius would have an overall market share of 42% at the close of 2006. Sirius currently has an overall market share of about 38.5%.As things now sit, XM is projecting NET additions of 2,567,195 subscribers in 2006. A figure below last years pace of 2,700,000. By contrast Sirius is projecting NET additions of 2,883,440 this year. A figure well above the 2,200,000 that Sirius added last year.Sirius and XM have tended to trade in concert with each other. Does this latest information show a seperation? Only time will tell. Clearly, the secor is growing, but it would appear that Sirius is the company gaing more of the growth.5/24/2006 02:41:00 PM
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