Sirius Confirms iPod Satellite Talks

An anonymous reader writes "Remember those iPod Satellite rumors last December? Mel Karmazin, the CEO of Sirius Satellite Radio, announced at the 2005 Media Summit that he had discussions with Steve Jobs about the possibility of putting Sirius' technology in future iPods. Steve's response? Not interested."

Comments

iTunes Says Moo

[fembots]

Songs in iPod will grow old and users will eventually buy new ones to replace the olds, and iTunes the cash cow is waiting.

Being a satellite radio will allow users to use iPod without purchasing anything thing more from Apple.

Re:iTunes Says Moo

[jm92956n]

Except iTunes isn't the cash cow: the iPod is. Apple has made no secret of the fact that their profit margin on each song sold is extremely low, and the primary objective of the iTunes music store is to sell more iPods, where quite a bit of profit is made off of each unit sold.

For reference, check out this article: Apple profit surges on iPod sales

Ladies and Gentlemen

[suso]

Steve Jobs, the Prince Charles of the tabloid computer industry.

iPod Satellite Radio

[VermifugeRT]

I don't claim to be an expert on the subject, but I think he made the right choice.

Satellite radio has limited appeal. I don't know many people that are excited about the idea of radio you have to pay for, commercials or not. Digital Radio (Digital FM & AM) will offer CD quality broadcasts in the near future effectively killing the satellite Radio market.

I discovered MP3s nearly 10 years the time I spend listening to the radio has decreased. Even before that CD players often omitted a radio tuner further effecting how I listen to music. The iPod and other MP3 players have eliminated my need for radio.

The impeding failure of satellite radio aside, I don't see how it would even fit into Apple's bigger plan for the iPod. The iPod allows us to create out own personalized 'radio station' without commercials.

Now I'm just dependant on friends to introduce me to new music. I think they have better taste then the DJ's and what the big labels want to shove down my though any way.

Why bother?

[sploo22]

Why should I bother with satellite radio anyway? I can just subscribe to a few podcasts, maybe download a few extra tracks from the artists' sites once in a while and I have plenty of music to keep me busy, given how much I use my iPod. Plus I get that warm fuzzy feeling of being RIAA-free.

A song not downloaded off iTunes is a loss

[Dancin_Santa]

If you consider that any song that is ripped from original media instead of being downloaded from the iTunes store is a potential loss of revenue for Apple, then you can see how Steve would be against the idea.

With Apple at the forefront of online music stores, it makes sense that we support them by buying our portable music at iTunes rather than listening to radio (whether free or otherwise). Not only can we, the listeners, decide what we want to hear at any given time, it benefits Apple in a way that mere words cannot.

Steve Jobs has again seen the correct path. While it may hurt Sirius XM in the short term, in the long term I think it will be a boon to everyone to have a strong Apple Computer company.

MyFi complaints

[UserChrisCanter4]

Perhaps Steve's just seen what some people ran into with the MyFi.

Right before I graduated from college, I was working at a large consumer electronics store to pay the bills. As frequently happened, we were given the opportunity to purchase XM equipment directly from a manufacturer at ludicrously low prices. This sort of thing is common in certain sections of electronics retailers; car audio and home audio traditionally have a huge markup, and manufacturers offer direct purchase plans that end up being better than the normal employee discount, all in the hope that an employee will fall in love with the product and recommend it to customers.

This time, we were offered the XM MyFi for 6 months of service. That was it. We paid shipping on the player and prepaid six months of service. That meant $60 for a player that was retailing in the mid to high- $300s. Several guys jumped on it.

AND HATED THEM.

These things were wretched. I'm not sure if we got a crappy batch (although some personal online reviews at the time were similar to our experiences), but these things couldn't hold onto a signal if the fate of the earth depended on it.

One guy actually walked outside with his MyFi while it was hooked to a small set of portable speakers for purpose of demonstrating the new utter crappiness to the rest of us. He held it out from his body. The unit played fine. He held a small stack of about 15 papers above it. The signal died completely.

Most of us simply sold them on eBay. The profit was reasonable, but given the amount of problems, I was just glad I never purchased one.

Indirectly, it confirms what I'd already seen with my father's car satellite radio system. Terrestrial rebroadcast is great in some areas. In others, pulling into a gas station cuts out audio entirely.

iPods work damned well. The iTunes sync system is great, the interface is nearly as simple as it gets, and unless you have a peculiar niche desire for your player, it does everything most people want. Now imagine the same player randomly cutting out when you walk under trees by the sidewalk, or when you walk into the gym because rebroadcast isn't reaching the area you're in, or when you stick it in your pocket (if it behaves like some of our MyFi's). If and when Sirius or XM can demonstrate a 99% effective coverage system for a player that can't guarantee free view of the sky, then we'll talk.

Until then, Steve, don't pollute an otherwise great player.

Re:MyFi complaints

[UserChrisCanter4]

Eh, I wasn't hinting at pollution here. I think a satellite-enhanced iPod would be great, provided it worked. Thing is, that's a big "if."

I disagree with your statements, though.

The Mini was the fastest-selling product in Apple's history. While you (and I) may disagree with the price/capacity point, it's obvious that a lot of consumers did not. I learned long ago that in most cases, Apple knows what people want far better than I.

The U2 edition is a limited edition. The $50 does get you a different case, but it also gets you a credit toward the U2 uber-Box set on iTunes. I've never even seen one in a store (although I guess Apple stores probably have one). It seems more like the kind of thing that a U2 fan would actively seek out. It's there, it's $50 more, you're welcome to buy it if you want.

The iPod photo is an asinine product, IMHO, but see above. Apple usually knows people better than I do. I could see buying the $599 model to get the 60GB drive, though.

Apple probably won't do a $199 shuffle. What they will do is the same thing they've been doing with the iPod since day one: Same price, bigger capacity. The $99 price point would get you 1GB, the $149, 2GB. Oh, yeah, and the iPod mini would probably bump to 6 or 8GB as hard drive capacity marches right along. We won't even get into the fact that the mini has many things consumers want (screen, colors, etc.) Again, see above: Apple knows what people want better than I do.

Re:I think it's a mistake

[Frogbert]

Wouldn't there be some sort of technical limitations on how small a sat radio could get? And what about power requirements. It seems to me that to recieve sat signals you would need a pretty good reciever and it would probably suck the battery life.

Also sat radio is, as far as I know, only really popular in north America.

Such a device would be useless abroad.

Jobs hates subscriptions

[iluvcapra]

This is just a conjecture on my part, but it seems that one of Jobs' insights, or pecadilloes, or whatevers about selling is that he thinks people hate supscriptions. He could have made iTMS a subscription service, but didn't, and he prospered. He shows little interest in Sirius because you only really rent Sirius or XM, and perhaps he takes a given that this makes people think twice before buying -- subscriptions are the anathema of gee-whiz, they reek of responsibility and if you are being sold a subscription, you're going to put a lot more thought into it before you do it. It also perhaps worth remarking, if only in passing, that the most successful internet/IT ventures of the last decade have been either free to the consumer (Yahoo, Google) or paid on instance of use (eBay, Amazon).

Contrast this with everyone's M$ conspiracy theory, where .NET is a big trap to suck everyone into paying monthly to use Word. I don't think this would work; imagine all those home users seeing "MICROSOFT.COM THANKS YOU-0231" on their Amex statement every month, and then wondering if there was another way. Even if monthly subscriptions are cheaper than buying a new package every 5 years, the psychological impact of paying monthly for something that only seems to get more features every year or two would insurmountable (and, after all, how many features could they possibly add to Word to justify the constant payment, the days the net is slow, etc.)

So, I guess I agree with Jobs on this, and I have doubts about subscriptions for pure information services.

Although, I do have .mac.... Hmm. I'm a hippocrite.

Not Suprised

[MBCook]

I'm not suprised at all. Let's look at the reasons why:

• Size - The iPod is small. While the Delphi portable XM radio is not big, it's much bigger than an iPod. So you'd have to make the iPod bigger (or at least much thicker) do it it.
• Demand - People are having hard times finding iPod Shuffles because they are very hard to keep in stock. The "old" iPods are still selling like hotcakes too. Apple doesn't need the help/feature to sell iPods, they are doing fine now.
• Demand 2 - How many people are actually demanding one of these things? First to use it (or at least the main feature that differentiantes it from a normal iPod) you have to pay a monthly fee. And to record the Sirrius content (assuming they allow that which would be a major reason to get one) you'd either have to keep it running (battery would die fast) or keep it plugged into the wall (so it could only record things when sitting in it's cradle at night for example). You want it to record a program that comes on at 2:00 PM? Better find a cradle you can stick it in (that has an antenna setup) so it can record it.
• Battery - As already mentioned, having that radio in there would use battery. And to have it record live radio so you can pause it (like the Delphi unit does) you have to run the audio electionics, the satellite radio electronics, and the hard drive. That has GOT to be a battery drain.
• Complexity - Not only is that a lot of stuff to put into a small box, but the interface would probably suffer too. Navigating radio stations wouldn't be too hard, but how do you make it so you can easily schedule recordings and such? I think it would be hard to make that as clean as the rest of the iPod UI while making it integrate well.
• Why Sirrius? - If the satellite iPod is such a hot product (I admit it sounds intereting), why should they use Sirrius? Isn't XM doing better? And either way, I'm sure XM would KILL to get that deal too, so why not play them both off of eachother for a while to get better terms? You don't have to accept the first formal offer. Heck, Apple probably has enough clout that they could make BOTH a Sirrius iPod and an XM iPod (none of those "you can't work with out compeditor" contracts) because the idea is supposedly so lucrative.
• Sirrius and XM to merge - As long as you are talking about rumors, there was that rumor that the two would merge and then where would Apple be? They might want to hold off because of that speculation.
• New Products - Last is the iPod line. We got the Mini a year ago, 4th gens not too long ago, with the iPod Photo about the same time. We got the iPod Shuffle last month. I'd think they'd want to wait a year before introducing anything more than an evolution (like 2nd gen to 3rd gen).

I'm not saying it's not a good idea, but I think it is definatly too early. It will be a while before we see such a thing. I don't see how it could happen right now. Just doesn't seem to make sense.

Re:I think it's a mistake

[bsharitt]

Also sat radio is, as far as I know, only really popular in north America.

And not really that popular here.

Why stock analysts should stick to analyzing stock

[StikyPad]

Steve isn't stupid. He knows something the rest of us don't. For example, he may be angling for a better deal from Sirius or XM. Or he may just be a realist who gets that the iPod would have to become the iBrick to accommodate the battery life needed to mix in radio.

This is why people who don't understand technology shouldn't speculate about it. Increased battery drain from an XM/Sirius tuner? A tuner would be 100% solid state, as opposed to the hard drive that currently has to be spun up to read MP3s. And what, exactly, would they need to add?

LO - Check
DSP - Check
Audio Amplifier - Check
User Interface - Check

Most of the main parts of a receiver are already existant in the current iPod. All they really need to add is a low noise RF amp, program the digital decoding method, and slap an antenna on that sucker. It takes a minimal amount of power to drive most of the circuitry -- the biggest power drain is the audio amp. If anything, the satellite radio enabled iPod would get better battery life when used as a reciever.

iTMS profit is low for now

[Infonaut]

While it is true that the iPod is the cash cow at this stage of the game, I'm not sure that it will always remain so. I think a lot of people are stuck on the whole "Apple makes money on the blades, not the razor" notion we've all learned from Gillette.

But there's no reason Apple couldn't make money off of both hardware and a music service. If I were Steve Jobs, I'd be downlplaying the long-term profitability of the iTMS every chance I could get, for the sole purpose of scaring competitors away. Look at Real, for example. With no hardware to sell, they're still trying to compete with the iTMS, and so far with limited success.

If Apple can outlast competitors in the online music store arena, it could start making a healthy profit at it. From there, migration into an online video download service seems like a natural progression (when the labels and consumers are ready for it).

Apple seems to be moving into the place Sony would like to be - the nexus of the consumer digital lifestyle. If that's the case, the old, "Repeat after me: Apple is a hardware company" mantra may not hold up for long.

Re:iPod Satellite Radio

[uberotto]

Satellite Radio is much like a TiVo. Those who don't have it, don't really miss it. Those that do, can't imagine life without it.

A year ago, my wife bought me a TiVo for my birthday and I got her a Sirius Sattelite radio. It seemed like a good deal at the time, I rarely listened to the radio and she didn't watch much T.V. A year later, she spends all of her time watching TiVo and I spend all my time listening to sattelite radio.

Since getting sattelite radio, I have pretty much stopped downloading mp3's (don't need them, too much good music on Sirius). A couple of months ago, I bought my first CD in THIRTEEN YEARS. I'm not joking, the last album I paid money for music before this past December was Tesla's Edison's Medicine in 1991.

Sure, you can download several hundred songs for your iPod and create your own commercial free radio, but describing Sattelite Radio as commercial free is like describing Open Source software a software you don't have to pay for. Commercial free is just scratching the surface.