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Does a Sirius and XM Merger Make Way For An Apple Deal, iPod Integration?

Authored by Jay Baage on February 20, 2007 - 10:07am.
Although dismissed as a possibility for a long time due to anti-monopoly laws, the satellite radio rivals Sirius and XM on Monday announced that they were going to try to do the sensible thing and merge into one company. Legal issues aside, the interesting question is now how the combined forces of Sirius and XM will stand up against other formats of music consumption? The announcement specifically mentioned the threats from "iPods and mobile phone streaming". This is where the focus rightly should be - the merger should be seem in the light of increased pressure to compete with not just radios, but with the digital music players that replace them.

The news of the merger resurrects the possibility of iPod integration with satellite radio. This idea has been killed off by Apple CEO Steve Jobs after negotiations with Sirius chief Karmazin “failed to impress” (see Financial Times article here). Jobs mentioned a lack of interesting content as a key obstacle back in 2005.

If and when Sirius and XM are allowed to merge, that would mean many more channels in one place, once some of the fat has been trimmed off. Moreover, the blog AppleInsider notes that Apple is certainly no stranger to the concept and was caught trademarking the possibility of satellite music streaming in its enigmatic “Mobile Me” application. The filing includes the following description:

"providing digital music from local or global communications networks, including the internet, intranets, extranets, television, mobile communication, cellular and satellite networks; operating chat rooms; publication of electronic books and journals from local or global communications networks, including the internet, intranets, extranets, television, mobile communication, cellular and satellite networks; providing on-line electronic publications; electronic games services provided from local or global communications networks, including the internet, intranets, extranets, television, mobile communication, cellular and satellite networks; information relating to music entertainment, education, interactive entertainment and education, provided on-line from local or global communications networks, including the internet, intranets, extranets, television, mobile communication, cellular and satellite networks; music library services; organizing and conducting seminars and training courses relating to science, engineering, computer systems and business". More info here.

While Apple’s first choice might be to integrate Wi-Fi capacity to its iPods, that would allow users to download and share songs wirelessly (like the limited capacity now being made available by Microsoft Zune and the MusicGremlin), an integration of satellite radio capability makes more sense then ever now.

However, even though Sirius, XM and Apple all might want to make a deal, they will have to wait for the anti-monopoly bureaucrats to have their say, which might not be until the end of 2007.

Joakim Baage

Related Links:
Online Poll: Will the merger between XM Radio and Sirius be approved?
Analysis: Why the XM-Sirius Merger Will Proceed
New York Post says XM and Sirius to Announce Merger
tags: Deals | Internet | Marketing | Music | iPod | Apple | CE | Sirius | XM |



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