XM Gets GM Boost

XM (XMSR Quote - Cramer on XMSR - Stock Picks) gets a little help from a big auto partner.

GM (GM Quote - Cramer on GM - Stock Picks) says it cut the price of its XM radio option to $199 from $325, making it a little cheaper for car buyers to take the pay radio service. GM says the price will be effective on most cars in the 2007 model year, starting later this year.

The automaker says it has seen lower installation costs and is passing on the savings to car buyers. The $199 price tag covers the radio, but the $13 monthly service fees are not included. GM, like Honda (HMC Quote - Cramer on HMC - Stock Picks), offers three-month free-trial periods for the satellite radio service on its XM-radio-equipped cars.

The news comes as XM stopped production of five radios that may exceed radio signal limits enforced by the Federal Communications Commission. The radios involved are add-on devices designed to pipe XM signal to car radios over FM frequencies.

Car audio systems that have XM integrated into radios do not have the FM emission issues that have plagued the add-on devices.

GM is a big investor in XM, and says it has built more than 4 million cars equipped with XM radios.

XM shares rose 29 cents to $11.30, and rival Sirius was up 3 cents to $3.78 in premarket trading Wednesday.