Sirius Satellite Radio's ( SIRI) big numbers have a funny new car smell.

Sirius added 359,000 new users in the third quarter, nearly doubling its year-ago increase. At first blush that looks far more impressive than the 48% subscriber growth at rival XM Satellite ( XMSR).

But it turns out that not all those new Sirius subscribers are actual people.

XM and Sirius both count on arrangements with big automakers like Ford ( F) and GM ( GM) to power subscriber gains. But where XM waits until a car buyer activates the service to add to its new-user tally, Sirius sometimes starts counting as soon as a car with a factory-installed radio arrives at the dealership.

So a number of those freshly minted Sirius subscribers could actually be Chrysler Concordes sitting on a dealer's lot somewhere. Observers say that kind of liberal math could be bolstering Sirius' growth -- especially now, as dealers are receiving a new crop of 2006 models.

Sirius' practice means the company can "call it a sub, even if it is sitting under water on a dealer's lot in New Orleans," says one investor who sold Sirius and holds XM.

Satellite radio has gone from a mere cult fascination a few years ago to a hotly contested two-player industry. XM and Sirius are battling head-to-head to capture the largest share of a potentially massive new consumer market.

Delivering growth is paramount. The faster the growth, the wider the doors are open to capital markets for future financing, factory installation deals with big automakers and technology partnerships with leading device makers.

Perhaps most important, routinely raising subscriber growth targets encourages satellite radio investors to tune out the heavy costs and massive losses associated with the business.

So it is a bit disconcerting to some industry observers that XM and Sirius differ in their definitions of subscribers.

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