While I do take more mea culpas than most people in this line of work, I'm overdue for one with respect to Sirius XM (SIRI).
Simply put, throughout 2011 and 2012, I missed horribly on the company as well as the stock. And I don't think the future, at least not in my lifetime, will shine brightly on days gone by predictions of doom for Sirius XM.
I don't understand the ins and outs of Sirius's abusive relationship with Liberty Media (LMCA) as well as TheStreet's Richard Saintvilus does so I can't rip him too hard for his take on the situation. However, I can take exception with some of the knocks he has against Sirius XM, the business and consumer service, in the above-linked article.
Whenever Apple (AAPL) enters the conversation things get murky. That's because, much of the time, Apple probably shouldn't even enter the conversation.
Apple's "CarPlay" is no more of a threat to Sirius XM than Pandora (P) is or the iPod was. Today, most people use their iPhones (and other smartphones) like iPods. And, even still, Sirius XM remains strong and stable. The IBM (IBM) of all media companies if you will.
They're not too sexy. They don't generate headlines (unless Howard Stern does something newsworthy). And they're probably not the most dynamic and innovative company digitally and technologically. But they remain a surprisingly refreshing option on the dashboard.
So let's not confound Apple's CarPlay and Sirius XM. They're two completely different things.
CarPlay, for all intents and purposes, is iOS for your dashboard. In some respects, Apple would like to make iTunes Radio the default option for radio/music listening in the car, however it treads lightly and will continue to tread lightly in this respect.
Apple's not boxing every other piece of content out of the car. That would be a dumb move. People like their apps -- such as the ones above -- and, by removing them, Apple would likely trigger a backlash it has no desire to deal with. Because, and this is key, Apple is not a content company.
Apple is a hardware company. And CarPlay exists to further the utility of your iPhone and iOS as the software that powers it. Part of the beauty of the iPhone experience is having all of your favorite apps available via an intuitive, beautifully crafted user interface ... something you can see as well as touch and manipulate.
This brings us to another crucial piece of information people, including Saintvilus, leave out when they argue Apple will crush -- in this case -- Sirius XM in the car. While Sirius XM has an app, it is not an app.
Speaking broadly, Sirius XM, as well as traditional radio, are platforms in a similar vein to how CarPlay, as iOS for your car, is. If you pay close attention to the CarPlay demos we saw from Geneva earlier this year (here's one from CNET), it's clear that automakers want CarPlay to coexist with their own in-dash systems as well as anything Android might offer down the line. That leads me to believe the last thing they will do is remove radio buttons from the dash.
Despite hype to the contrary, at this point, there's just not a compelling enough reason to do so. And Apple knows this. Automakers want to provide consumers with a complete in-dash experience. Some people will favor CarPlay and be Apple-centric in how they use it. Others will favor CarPlay, but -- just as they do with their iPhone -- use it to access non-Apple properties. Others will favor something else. Maybe Sirius XM. Maybe Pandora via the automaker's own technology. Or maybe a mix of all of the above or something all together distinct.
We're not talking about some either/or proposition here.
It's not like CarPlay comes along and renders everything that came before it non-existent. Just as Pandora didn't render Sirius XM non-existent and Pandora and Sirius XM didn't render AM/FM radio non-existent. While, at times, I have been as guilty as the next guy of jumping to conclusions, something "shocking" has happened over the last few years:
Everybody has grown. Traditional radio continues to grow. Satellite radio continues to grow. Pandora and Internet radio continues to grow. And Apple remains a hardware company with an excellent software and services ecosystem that, outside of iOS and the iTunes and App Stores, doesn't really need to be proprietary.
The thing about Sirius XM -- going back to the notion of it as the IBM of all media -- is that it's not very sexy. And it doesn't try to be. But I'll tell you this -- every time I step into a rental car and see that Sirius XM is active inside I'm pretty happy about it. And I end up using the service almost exclusively for as long as I have the car.
In that respect, Sirius XM just keeps on keeping on, as alerted by Briefing.com via my Yahoo! (YHOO) Finance feed Tuesday morning:
Granted -- these experiences haven't prompted me to resubscribe, but I'm not the target customer for the service. Sirius XM obviously knows its target audience and treats its members well enough to keep them -- in quite a few cases -- for life. Transitioning its customers to an Internet-delivered version of the service -- if indeed that's what needs to happen someday -- won't be all that difficult. The company already (actively) has the pieces in place.
But why bother when you have seen subscribers trend from 21.9 million at the end of 2011 to 25.6 million at the end of last year with stable churn. It makes no sense. And it puts Sirius XM in a position not all that different from Time Warner's (TWX) Home Box Office (HBO). Don't blow up a lucrative business model before you have to, but be ready to move when the time comes.
That's not to say the stock's a great investment at $3.20. However, considering where it came from, it's difficult to lament the recent decline, regardless of the circumstances, which have very little to do with the health and vitality of the company's business. Any downside is what it is in the midst of a very complicated situation with Liberty.
--Written by Rocco Pendola in Santa Monica, Calif.