Is It Safe? iPhone App Won't Save Sirius

TheStreet.com Ratings looks at a company's risk-and-reward potential in its "Is It Safe?" feature. Look for your stocks at 4 a.m. on Tuesdays and Thursdays.

Sirius XM Radio(SIRI Quote) shares are trading for less than a pack of gum, which isn't a good sign. Satellite radio, which many expected to replace conventional radio, hasn't caught on. Growing competition from podcasts and free Internet radio applications makes the company's prospects look bleak.

Extreme volatility is a side effect of a share price that hovers around 40 cents. Sirius's stock has almost tripled this year, with several peaks and valleys. However, the stock has gained no value this quarter, even as the Nasdaq rose 16%.

Last week, Sirius launched its long-awaited Apple(AAPL Quote) iPhone application with the hopes that giving customers mobile access would help attract subscribers and boost revenue. While it quickly shot to the top of the most downloaded app list, much of the interest probably came from current customers.

The company also dangled a seven-day free trial to lure iPhone owners. The most telling statistic will be the number of downloads that translate into new accounts after the trial period ends.

Stiff competition from free applications with similar functions may deter potential customers who are sensitive to the $12.95 monthly price tag for mobile Sirius access.

One of those applications is Pandora, a free program that streams music based on the users' preferences. For users interested in news or commentary, Apple's own iTunes app offers iPhone users access to a gigantic library of free podcasts.

Early reviews of the Sirius app have been exceedingly negative. Users have logged more than 20,000 reviews so far, rating the app two stars out of five.