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Technology Stocks : XM Satellite Radio Holdings Inc. (XMSR) -- Ignore unavailable to you. Want to Upgrade?

To: pcstel who wrote (572)	4/25/2003 9:08:37 AM
From: DaveMG	Read Replies (1) \| Respond to of 3386

There are apparently large variations in the subsidies. The plug and play Sony aftermarket product which has essentially been replaced by SKY-fi had a high subsidy, Sky-fi has a low subsidy. GM gets something like 50$ per radio installed,but Honda, Toyota, Audi, are getting next to or nothing. I think you're oversimplifying a bit..

To: pcstel who wrote (572)	4/25/2003 9:32:01 AM
From: i-node	Read Replies (1) \| Respond to of 3386

It's a valid statement! Can you name a highly subsidized subscriber model that the subsidies went away? Can You?? Honestly, I'm not looking at other "subsidized subscriber models"; I just don't see where there is a pertinent comparison. These comparisons with DISH or cell phone companies just don't hold water. They're in no way related, not the same, never will be. I find it much more reasonable to look at it from a different point of view. WHY WOULD XM SUBSIDIZE MANUFACTURERS INTO THE FUTURE? When you're selling millions of units, each of which has excellent profit potential for the manufacturer, you're not going to pay people to build them. 10 years from now, XM will be in a position to charge manufacturers to license its technology. Delphi has made it clear that the SKY FI has become a bright spot in their product line and profitable for them. How long do you think XM is going to subsidize THAT? The Delphi receiver alone is flying off shelves for $129. When you're building these receivers in volume, you can make good money at that price -- particularly when you add a $69 home or auto kit (each with a manufacturing cost of perhaps a couple of dollars), jam boxes at $99 (cost to manufacture, a few dollars), etc. Delphi is loving this. The subsidy is already way down, and will continue to decline approaching zero. Never coming down", and "never going away" are two completely different concepts. Fair enough -- you said they were never going away. But excuse me if I don't reread posts which are six months old. But let's not split hairs -- the question is whether subsidies will come down enough that they are insignficant. All this is speculative. But I refuse to follow blindly the notion that XM is just like every subscriber business -- from cell phones to satellite TV, because it simply isn't; it doesn't look like it, the revenue and cost structures are totally different, and frankly, the equipment is totally different.