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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)
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To: i-node who wrote (360)11/19/2002 5:48:04 PM
From: verdad  Read Replies (1) of 3386
 
I agree the outcome of the OEM market (particularly what percentage of new GM vehicles equipped with XMSR are activated in Q4 2002) will make or break the outlook going forward.

The concern would be that, as a trend, XMSR GM new car sales do not materialize en masse for whatever reason (less than 50% of those equipped with XMSR are activated for service either due to cars not being purchased immediately, or the service not being purchased, or both).

And as you've mentioned, annual operating expenses for the XMSR venture are not cheap. In an easy financing environment, this would be a 'no-brainer'. Today, this business will struggle and only succeed with sustained interest by big pocket investors/partners and sizeable interest by consumers.

From a financial payback perspective, 200,000 subs is a drop in the bucket and, as you've mentioned, so is 1,000,000. XMSR needs 4 million. Be interesting to see how this one plays out.
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