Monday, June 05, 2006

Controversy brings awareness...XM wearables highlighted on MSNBC

June 5, 2006

Controversy follows XM innovation
By Ed Duggan
South Florida Business Journal (posted on www.msn.com
Updated: 8:00 p.m. ET June 4, 2006

The low-profile XM Satellite Radio Technology and Innovation Center, which creates new high-tech products popular with consumers, has spawned one that's become a lightning rod for a recording industry lawsuit.

The latest offering from the Deerfield Beach arm of XM Satellite Radio Holdings (NASDAQ: XMSR) is an iPod-like device that connects to any XM Satellite Radio to download up to 50 hours' worth of music or talk. Like a digital recorder, it can replay anything off the XM Satellite system without cost, but it's also an MP3 player when placed in a cradle that can download and record songs from a play list via Napster at 99 cents each.

There are two versions: the Inno from Pioneer and the Helix from Samsung. Both had their origins in the local innovation center and are virtually the same machine. Each retails for $399.
One TiVo-like function that is different from a typical recorder is that a user can be listening to a tune on XM Satellite Radio and choose to record it from the start, even though the tune may be halfway through.

The Recording Industry Association of America (RIAA) wants a broader and more expensive license to cover the additional devices. Its lawsuit, filed in New York, claims "massive wholesale infringement" and seeks $150,000 in damages for every song copied by XM customers using the next-generation devices. Apple's iTunes, Yahoo (NASDAQ: YAHOO), Rhapsody, Napster (NASDAQ: NAPS) and XM's chief rival Sirius Satellite Radio (NASDAQ: SIRI) have already agreed to more expensive distribution licenses to download songs, according to the RIAA.

XM counter-claims its devices are legal, allowing consumers to record radio programs for their personal use - as the law has allowed for decades -and that the devices are similar in their refinement to a videocassette recorder for television. Enough is enough, XM chairman says
XM Chairman Gary Parsons said in a television interview that the company already pays broad performance licenses and anything additional would be a "new tax being imposed on our subscribers."

In an interview with the South Florida Business Journal, Brian Shea, VP at XM Satellite Radio, said the service produces 80,000 hours of content each month on its 150 stations. He expects the company to be cash flow breakeven by the end of the year and increase subscribers to 8.5 million, up from its current 6.5 million.

The Technology and Innovation Center is far-removed from lawsuits or controversy and is focused on making its service more user friendly via its technology and software discoveries.
Designed as a practical think tank, the facility has more than 70 employees, most of them engineers.

"We've doubled in size over the five years that I've been here, first in Boca Raton and now at the Quiet Waters Industrial Park," said Daniel Battista, VP of new product development. "We've already outgrown this facility and are presently turning open spaces and conference rooms into offices to handle the growth."

The innovation group designed its own chip sets that control the radios and complementary devices. They were tested in an electronic testing panel that was nicknamed "The Ferrari."
"That's because the test device cost as much as a Ferrari," Battista said with a smile.
When it comes to new products, Battista is close-mouthed about what's coming down XM's pipeline. But one clue that future breakthroughs may be in video was the company's demonstration of pictures on its system that changed every 10 seconds, as well as an introductory video of the capability it made at the recent Consumer Electronics Show in Las Vegas. keyboard

Link to story: here

6/05/2006 07:51:00 AM

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