Tuesday, October 03, 2006

XM's Hyundai News

October 3, 2006

For XM investors the news regarding Hyundais factory install program is very welcomed, as it should be. This 100% factory install ushers in what may be a glimpse of things to come from other manufacturers, and this program should give XM exposure in a bigger way.

We feel that it is also important that investors be aware of when they can expect to see the impact of the Hyundai installs.

Last quarter XM announced that the OEM installs for Hyundai, Nissan, and Toyota would be counted in a different manner than those XM gets from GM or Honda.

Because XM does not get any subscription revenue from Hyundai, these installs will not be counted as subscribers until after the three month trial is complete, and if they decide to keep the service and become "self paying".

Thus, a Hyundai Santa Fe that sells today, will not be seen in the subscriber rolls until January 3, 2007, and only then if it converts to a self paying subscriber. This is something that investors should be aware of, because this is the first time that this type of counting method could have a material impact on the numbers.

Bottom Line. The news is great, just be aware of how things are tabulated. You will not see the impact until Q1 of 2007.

10/03/2006 11:05:00 AM

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