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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR)
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From: i-node8/16/2006 3:40:22 PM
   of 3386
 
GM Plans to Cut Price of XM Radio to $199 From $325 (Update2)

c.2006 Bloomberg News

(Adds comments from XM and analyst in third and fifth paragraphs; opens shares in
sixth paragraph.)

By Don Jeffrey

Aug. 16 (Bloomberg) -- General Motors Corp. plans to cut the price of
factory-installed XM Satellite Radio Holdings Inc. service to $199 from $325 beginning
with 2007 models.

More than 90 percent of GM's 2006 and 2007 vehicles offer XM Satellite's radio
service either as an option or as standard equipment, the Detroit-based automaker said
today in a statement.

"The reduction in price is a function of improving technologies and cost reductions
in the hardware," said Chance Patterson, an XM spokesman. "XM is not funding the cost
reduction."

GM, which was the first automaker to install satellite radio as a factory option in
2001, said more than 50 of its models have XM radios. New-car owners receive three
months of free XM service. After that, the monthly subscription is $12.95. XM has said
that 54.5 percent of new-car owners choose to subscribe after the trial period.

"In a perfect market this could be old news," said Craig Moffett, an analyst with
Sanford C. Bernstein & Co. in New York. GM announced it would reduce the price of the
radios early this year. "The sentiment around XM has turned so decisively bearish that
a piece of news like this can often be a catalyst for people to reassess their biases."
He rates the shares "outperform'' and doesn't own them.

Shares of Washington-based XM rose 27 cents, or 2.5 percent, to $11.28 at 9:49 a.m.
in Nasdaq Stock Market composite trading. They had fallen 60 percent this year before
today. GM shares, which had risen 57 percent this year, fell 14 cents to $30.40 in New
York Stock Exchange trading.
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