Last week, Sirius Satellite Radio held a call-in press conference. Most of the questions came not from the press but from Wall Street security analysts.
Seems there is a cloud or two between Sirius’s New York headquarters and orbital prosperity.
Sirius is one of two start-up satellite radio companies promising clear radio signals for mobile listeners from coast to coast. The promise includes a broad slate of original programming, much of it aimed at long-haul truck drivers.
At the Sirius press conference, Chairman and CEO David Margolese said that satellite-capable radios were available now under the Kenwood name, but those radios lacked an essential chip still being "tweaked" by Lucent Technologies.
Early buyers would be supplied with the modules as soon as they were commercially available, he explained. But according to Margolese, commercial availability could be delayed; if it is, Sirius would probably not meet Wall Street expectations.
Sirius hopes to begin service in September. The company missed an earlier goal of January 2001.
Margolese also explained that negotiations to make Sirius radios available in Ford automobiles and trucks made by Freightliner and Sterling were going very slowly. Sirius still has no commitment to make the radios available as an option, even though Ford and DaimlerChrysler (parent of Freightliner and Sterling) are Sirius backers. He described the ongoing negotiations as a "bureaucratic long haul."
"We have 20 guys in Detroit. They tell us we’re going along at lightning speed," Margolese said. "There’s obviously a difference between lightning speed in Detroit and lightning speed in New York."
Even when Sirius-compatible radios are available as an option, it will only be a first step, said Margolese, because long-term profitability depends on making satellite radios standard equipment. That way, the cost of the radio and the first year of service is buried in the sticker price of a vehicle. But current negotiations don’t include discussion of the standard-equipment option.
Margolese explained that Sirius was fully funded for operations through the middle of 2002 and this was the first of regular, quarterly press conferences to keep investors informed.
Sirius is one of two companies striving to make satellite radio a reality. The other is XM Satellite Radio Holdings of Washington, D.C. Both companies have seen their stock drop into the NASDAQ exchange basement. Sirius’s stock price slid from a 52-week high of 60 to a 52-week low of less than 7. XM’s went from 46 to less than 4. Both stocks have risen from their lows, but only slightly.
According to a company spokeswoman, XM has successfully negotiated a deal to make XM-compatible satellite radios available as an option in GM products. GM is a major XM stockholder.
Meanwhile, Sirius and XM have agreed to develop a chip that will receive both services and that any new deals with OEMs will be non-exclusive. Truck and car makers will then install radios capable of receiving both Sirius and XM's satellite radio service.