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

To: pcstel who wrote (576)	4/25/2003 11:34:56 AM
From: i-node	Read Replies (1) \| Respond to of 3386

I prefer to use previous examples as my basis of opinion.. That works great if all the companies you look at are one, heterogenous group with no differentiating characteristics whatsoever. This is not a very reasonable way to look at XM (or SIRI), as it is an industry that I'm quite certain you have absolutely ZERO previous experience with (as do the rest of us). A $430 dollars CPGA with $10 in ARPU shows this one has a "long way to go". I thought we covered this a couple weeks ago. $430 was the average for 2002. The average for 2003 will be $175 or less, and for '04 will be $120 or less. I have seen not evidence of such "financial metrics" for a given device How about speaking English? "Financial Metrics for a given device"? What the hell does that mean? We were talking about profitability of manufacturing XM radios. Do you mean "cost", "revenue", or "margin"? I think it is obvious that the SkyFi unit can be profitable for Delphi without any subsidy from XM. Obvious. If you are suggesting this isn't the case, please explain why. Of course, it's easier to try and make "wild claims" rather than "verifing" your data points that you post. With all due respect, I think your claims are at least as "wild" as mine. In 10 years.. Cars will come from the factory with DirecTV. Some may. But TV in cars will never have the market penetration of SDARS. TV will undoubtedly be limited (legally) to passengers, and probably back-seat passengers. SDARS will not be. There is also the issue of whether people will pay $30-40/month for TV in the car which is seldom used, and used solely for passengers. SDARS at $10/month is a no-brainer for most people. A $10 or $20 fee for DirecTV will not cover the variable costs of providing the programming, thus a lower fee isn't possible. With XM, the programming can be sold at $7/month and still have it be profitable. As I've said, you can't just assume SDARS is like other subscription models. It isn't. I'll stick to modern financial models. Well, I see that -- even in the face of strong, incontravertible evidence that those models don't apply. The reason many people aren't any good at projections is because they are so confused with this notion that one business is just like the next. As a veteran of creating a lot of financial projections over the years, I can tell you it is far better to look at the fundamental business model of the business you're working on than to follow blindly the model of some other, unrelated business as you insist on doing. I must say, 25 years ago, I inadvertently did the same thing for a client, and the results were that the projections were not in the ballpark. I learned, then and there, you forget other industries, you forget "industry norms", and do the real math. You're so tied up in what other, unrelated businesses are doing that you can't seem to see the forest for the trees. SDARS is not like any other business you've ever worked with.