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Technology Stocks : General Magic -- Ignore unavailable to you. Want to Upgrade?

To: VivB who wrote (8063)	2/17/2000 1:51:00 AM
From: VivB	Read Replies (1) \| Respond to of 10081

Does anyone have an idea on what impact, if any, the agreement between the 2 companies (see article below) is likely to have on General Magic? Towards the end of the article it says that "XM has a deal with General Motors..." Does anyone know if this digital radio is going to be incorporated in the "OnStar" package? Satellite-Radio Rivals Agree To Cooperate on a Standard By GREGORY L. WHITE, Staff Reporter of THE WALL STREET JOURNAL; February 17, 2000; Tech Center The two upstart rivals developing systems to deliver digital radio via satellite have agreed to cooperate on a standard, preventing a looming battle over a technology they hope will become standard equipment in millions of new cars in the next few years. XM Satellite Radio Inc., based in Washington, D.C., and New York's Sirius Satellite Radio Inc. hope the deal will speed acceptance of the new radios, make them more convenient and less costly. "The opportunity is too big to make this an us vs. them," said David Margolese, Sirius chairman and chief executive officer. When the radios first appear in cars next year, they will still be proprietary technology, able to receive broadcasts from only one provider. The second-generation systems, due by about 2004, will be able to receive broadcasts from either XM or Sirius, or both, depending on what the consumer asks. Backers say the digital-radio systems will now do for car radios what cable did for television, providing as many as 100 channels of CD-quality audio nationwide. Both systems will broadcast their signals from satellites, providing national coverage, in contrast to the regional reach of traditional AM and FM. Sirius and XM have lined up a range of big-name sources for entertainment and news programming, some of which will be available commercial free. "We truly can now become the third band of radio on the dial," said Hugh Panero, president and CEO of XM. He said the agreement with Sirius avoids what some had thought would be a replay of the prolonged VHS-Betamax battle in the videotape industry. 1DaimlerChrysler to Buy Stock in Satellite-Radio Maker Sirius (Feb. 1) 2Blackstone to Invest $200 Million in Sirius Radio for a 10% Holding (Dec. 27, 1999) Over the past year, both companies have been racing to line up exclusive deals with auto makers to install their equipment. XM has a deal with General Motors Corp. and Sirius has agreements with Ford Motor Co., DaimlerChrysler AG and Bayerische Motoren Werke AG. The two companies' government licenses require that they develop radios that could receive each others' signals, but didn't mandate they shift entirely to a common standard. Mr. Margolese said the companies also have agreed to provide coverage for each other in the event one has an outage. Now that they have agreed to team up, XM and Sirius plan to focus on explaining the technology to consumers. They will have a shared service mark for satellite radio, like the CD logo for compact disks. "We're going to stop bashing each other," Mr. Margolese said. The two companies also agreed to resolve any outstanding litigation. The companies will continue to compete for subscribers and programming, however. Terms of their deals with the auto makers encourage those companies to roll out the systems broadly across their lineups. A $9.95 monthly subscription fee for the digital radio is likely to be wrapped into lease or other regular payments for cars. Sirius hopes to have its system operational at the end of this year. Mr. Margolese said a delay in the launch of its first satellite, originally scheduled for last month and now expected to be sent up in June, won't affect the start date. XM expects its network to be up in the second quarter of next year. Both companies announced the agreement after 4 p.m. regular trading on Wednesday, but shares of both companies soared in earlier trading. Sirius rose $7.8125, or 16%, to $56.8125, while XM increased $7.8281, or 25%, to $39.5781 in 4 p.m. Nasdaq Stock Market trading. Write to Gregory L. White at greg.white@wsj.com3 URL for this Article: interactive.wsj.com Hyperlinks in this Article: (1) interactive.wsj.com (2) interactive.wsj.com (3) mailto:greg.white@wsj.com Copyright ¸ 2000 Dow Jones & Company, Inc. All Rights Reserved.