Wednesday, November 15, 2006

A Deeper Look at October NPD

November 15, 2006

We received a comment regarding NPD that we find interesting. It is interesting because it is something that was mantioned in the XM Satellite radio conference call as well.

The comment:

"NPD includes Radio Shack, and Radio Shack only sells Sirius. If you take Radio Shack out of the data, then XM and Sirius are much clser to 50/50"

There is a basic and fundemental problem with this statement. If a consumer went to Radio Shack to buy a Sprtster, would they have a need to then buy another one? The answer is no. Simply stated, every satellite radio sold at Radio Shack TAKES AWAY from a sale at Best Buy, Circuit City, Ultimate, etc. If you wanted to be realistic about things, you need to include Radio Shack. If every radio Shack closed tomorrow, the consumers that went there to buy Sirius would buy it at Best Buy or Circuit City, etc., thus adding to Sirius' share at those stores.

To be fair, there are likely some sales that happen at Radio Shack that may have chosen XM if there was a choice in the store. However, realistically speaking, many people have already made up their mind prior to venturing out to a store.

NPD is what it is. A tracking of retail sales at participating stores. It gives a flavor for consumer sentiment, and gives data regarding actual sales.

If Coke was the exclusive cola at 7-11, AM-PM, Quickie Mart, and Mobil On The Run, would you subtract out those stores when compiling market share in the soft drink industry?

Simply stated.....A sale is a sale is a sale.

11/15/2006 10:42:00 PM

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