XM Satellite Radio and radio manufacturer Delphi yesterday introduced the Delphi XM MyFi, a portable, handheld satellite radio receiver the companies hope will lure more consumers to a medium currently limited to car and home units.
Along with giving its subscribers the convenience of a traditional transistor radio, the MyFi also offers a five-hour recording capacity to let listeners download favorite programs and songs.
The MyFi is the latest entry in the highly competitive battle over digital music, a fight that pits XM against its immediate competitor, Sirius Satellite Radio, but more broadly against on-line music sources like Napster, and the makers of small, highly portable MP3 and other devices. It was unveiled at a New York nightclub on the same day that Apple Computer used rock superstars U2 to promote the release of a higher capacity iPod, and less than a month after Sirius announced it had signed popular radio personality Howard Stern to a five-year contract.
Since it launched its service three years ago, XM has reached its 2.5 million subscribers through factory-installed receivers in automobiles, detachable units for other cars, and Delphi boomboxes. Over the past several weeks, it also announced a deal to pipe music into Starbucks stores, and to offer programming online for paid subscribers.
But XM's service, along with that of Sirius, has lacked the portability of devices such as the iPod and MP3 players. Now, with the MyFi, subscribers can receive XM's more than 130 channels of talk, news, sports, and commercial-free music, on a device about the same size as a handheld organizer.
Unlike Delphi's plug-and-play satellite radio receivers, the MyFi doesn't require an antenna and can be used with headphones. The device also comes with a docking station for recharging and accessories to hook it up to car stereos and home audio equipment.
MyFi will be available in stores and through on-line retailers in December -- too late for the post-Thanksgiving shopping rush, but still in time for the holiday gift-buying season. The suggested retail price of $349.99 makes it a high-end item, said analysts. And consumers still have to pay $9.99 per month for programming. But XM officials and analysts said the product is likely to appeal to those who prefer to have disc jockeys serve up music instead of having to burn their own CDs or download music to MP3 players.
Such "user-intensive" devices require consumers "to work too hard to get the freshest entertainment product," said Francisco Ordonez, president of Delphi Product and Service Solutions.
Ordonez and XM Satellite Radio chief executive Hugh Panero unveiled the MyFi at the Chelsea nightclub in Manhattan before an audience of about 50 reporters and Delphi and XM staff, as they nibbled on potato-goat-cheese-and-wasabe dumplings and shrimp on skewers.
In his remarks, Panero called the MyFi "the next big step" in the evolution of XM Satellite Radio.
Ordonez called the MyFi "a change not just in the satellite radio category, but in consumer electronics," and likened its debut to the introduction of the transistor radio and the portable CD player.
At the end of his remarks, Panero quipped, "We've gone Hollywood," and on cue, several "lifestyle" models -- a young male in a red hooded sweatshirt, a young woman in a pink track suit and a man in a business suit, among others -- descended a set of stairs, listening to the new radios.
XM officials would not disclose how much they spent to develop MyFi or how much they intend to spend on marketing it. They did, however, preview a new television spot featuring singer Elton John hawking the MyFi and his new song, "Answer in the Sky."
The roll out of MyFi caps a busy month for XM, which earlier this month debuted the "Bob Edwards Show," and shock jocks Opie and Anthony. On Oct. 20, the company also announced it had signed an 11-year, $650 million broadcasting and marketing deal with Major League Baseball.
Shares of XM closed yesterday at $32.54, down slightly from $32.74.
Even before the MyFi debut, XM Satellite Radio was on target to reach its goal of 3.1 million subscribers by year's end, said Janco Partners analyst April Horace.
"Will [the new device] continue to drive subscription growth? Yes," Horace said. "Has XM expanded the marketplace once again? Yes."
In a research note released yesterday, Legg Mason's Sean Butson wrote, "Although we are disappointed that the device will not be available until after Thanksgiving, we do believe it will be a game-changer and provide XM with a differentiated weapon in its retail arsenal."