Officials from XM Satellite Radio Holdings did not want to discuss downloading music onto the next generation of the Delphi XM MyFi handheld portable receiver because its existing model is so new and is still developing a customer base. A story in the June 8 Business section was unclear about why officials were cautious about the product's capabilities. (Published 6/13/2005)
XM Satellite Radio Holdings Inc., the District-based subscription radio service, said yesterday that it is developing a handheld satellite radio receiver that can download audible books, periodicals and radio shows -- and possibly music.
XM is partnering with Audible Inc., a provider of online streaming audio content, and plans to offer the device for sale next year.
With XM already ahead of its only rival, Sirius Satellite Radio Inc., in the development of receivers and other listening devices, the new gadget will likely be the first on the market to combine satellite radio and the ability to download content.
This led some industry analysts to interpret yesterday's news as a sign that satellite radio receivers and MP3 players, such as the Apple iPod, will come together in a single, much-anticipated product.
"We expect such a device to be able to purchase digital songs as well, although that functionality is not part of this agreement," Legg Mason Wood Walker analyst Sean P. Butson wrote in a note to investors.
XM officials were more cautious, noting that the Delphi XM MyFi, the first handheld portable satellite radio receiver, has been on the market only a few months and has yet to establish a big customer base.
Subscribers pay a monthly subscription fee of $12.95 for access to XM's more than 150 channels of talk, music and entertainment. While there is currently no way for listeners to digitally record and permanently store what they hear on XM, company officials didn't rule out the possibility that the Audible-ready XM receiver would one day provide that ability.
"We've got our folks . . . constantly looking at ways to add features to these devices," said XM spokesman Chance Patterson. "We're in a hurry."
Hugh Panero, chief executive of XM, and Mel Karmazin, chief executive of Sirius Satellite Radio, have both approached Steve Jobs, chief executive of Apple Computer Inc., about fusing Apple's popular iPod with a satellite radio receiver. But the radio executives have said that Jobs showed no interest.
At a minimum, the deal with Audible means the next iteration of the MyFi will let XM subscribers listen to some of Audible's 70,000 hours of spoken-word content on a new channel without having to fork over additional cash.
Audible users will have to pay to hear XM programs such as the "Bob Edwards Show," just as they do to access any other part of Audible's library.
Financial terms of the deal were not disclosed.
Aside from the new player, XM's arrangement with Audible fits in with the rest of XM's marketing and distribution strategy. XM, which has more than 4 million subscribers, has added customers largely with the help of automakers such as General Motors Corp. that have agreed to install XM-ready receivers in new cars. But the company has also picked up listeners by making its technology and service available in rental cars and on airlines.
In preparation for growth, the company said in a separate announcement yesterday, XM has signed a contract with Space Systems/Loral to design and construct a fifth satellite for XM. XM has three satellites in orbit. Boeing Co. is building a fourth, scheduled for launch in 2006.
Audible, based in Wayne, N.J., has followed a similar strategy, making Audible available on personal computers, iPods and some cell phones and handheld organizers.
"Audible and XM are the leaders in our respective businesses, so it's logical for us to work together on content distribution and technology," XM's Panero said in a news release.
"This announcement brings together the best of XM Satellite Radio and the best of the Audible audio experience," Donald R. Katz, Audible's chairman and chief executive, said in the news release. "Together our respective technologies will enable the consumer to listen to the finest in radio programming and the best of personalized, spoken-word listening on their portable audio devices."