Sirius to break even before XM
According to analysis of both companies, experts predict that Sirius will likely break even sometime in 2006. Sirius’s ability to bring down subscriber costs to $100/per puts them ahead of XM, which at current estimations will not see a profit until at least ‘07, despite its obvious market advantages.
“XM has the first-mover advantage in the satellite radio industry, giving it the largest subscriber base and revenues,” Kalla noted in a research report. XM “is also further ahead in hardware development, with three portable devices compared with Sirius Satellite’s one.”
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XM has exclusive distribution agreements, including one with Wal-Mart Stores (nyse: WMT - news - people ) for sales of portable radios and one with Time Warner (nyse: TWX - news - people ) unit AOL for streaming audio channels on the Internet.
Forbes cites the drawing power of Howard Stern among the reasons for Sirius’ earlier breakeven.
