XM Satellite Radio Holdings Inc. and Samsung Electronics Co. said yesterday that they will introduce a satellite radio receiver and digital music player that will let XM subscribers buy and download songs through an exclusive arrangement with online music store Napster.
The new device, which could go on sale this fall, is XM's first attempt to integrate its subscription radio service with the fast-growing market for portable MP3 players.
"Napster is excited to work with XM to create a cutting-edge product that merges the best of online and satellite music into one great, integrated experience," said Chris Gorog, Napster's chief executive, in a press release. The new service, called "XM+Napster," will be "nirvana for passionate music fans," Gorog said.
The deals with Samsung and Napster are part of a larger strategy to "enhance the ability to listen to XM in different environments," XM chief executive Hugh Panero said in an interview.
XM's more than 4.4 million subscribers pay $12.95 a month to receive more than 150 channels of news, entertainment, sports and music. XM also works with electronics manufacturers to develop receivers for automobiles and home stereo systems. Last year, Delphi Corp. introduced the first personal satellite radio receiver called the Delphi MyFi. The device XM is developing with Samsung will allow consumers to listen to live XM content when the device is plugged in to an XM-ready car stereo or to a home antenna. Consumers can mark songs they hear for purchase. When they return it to a docking station connected to a computer, the device will download the music from the XM+Napster service. Consumers also will be able to record live XM content, but they will not be able to transfer those songs to other devices or burn them onto compact discs. Currently, consumers can buy satellite radio receivers that also play content in the MP3 format, but don't offer the ability to download. Or they can buy satellite radio receivers that can record what they hear on XM but that can't be transferred to another device.
XM officials said they do not yet have detailed pricing for the device or for music purchased through the XM+Napster service.
Sean P. Butson, an analyst with Legg Mason Inc., called XM's deal with Samsung "groundbreaking," in a research note he published yesterday. Citing the fact that Samsung is also a leading manufacturer of cell phones, Butson said the deal "looks like an important first step towards a mobile phone/satellite radio."
When asked if XM and Samsung are working toward mobile phones with satellite radio receivers, Panero said, "We're looking forward to having the relationship evolve into other devices."
Financial terms of the agreement with Samsung and with Napster were not disclosed.