Chocolate vs. Stiletto
Just as SIRIUS prepares to launch the Stiletto portable satellite radio this August, Verizon Wireless is countering with a hybrid Cell Phone and digital music player called “Chocolate”.
Verizon partnered with Korean consumer electronics giant LG to import the Chocolate to the American market.
LG has sold more than 1 million devices worldwide since May. Verizon has felt the competitive muscle of Apple’s iPod, as the Chocolate has has comparable storage to Apple’s 1GB Shuffle or 2GB Nano iPod designs.
Instead of trying to convert iPod devotees, Verizon will compete for customers by focusing on people who don’t yet have a portable digital music player, said John Harrobin, vice president of digital media for Verizon Wireless, during a conference call with reporters.
“Radio is heavily programmed and can be formulaic. But this mobile platform is an excellent device for music discovery,” he said.
SIRIUS is looking to break out of the confines of their structured channel lineup with the Zing, which is said to feature community music discovery features and dynamic playlist capabilities.
“Our personal live satellite radio product, Stiletto, is great,” Mel Karamazin, chief executive officer of Sirius, said on a conference call. “We have been beta testing it for a few weeks and we will have it available to consumers by the end of the summer.”
Verizon will sell the Chocolate phone for $149.99, with a two-year subscription and after a $50 rebate. V CAST songs cost 99 cents if purchased from a PC or $1.99 if purchased and downloaded over the air.
In comparison, SIRIUS Stiletto will likely retail for $350-$450, in line with comparable devices from XM such as the Inno and Helix.
Nonetheless, SIRIUS has the continued challenge of balancing retail hardware costs with a monthly subscription service. Compelling content is the enabler, however new devices such as Verizon’s Chocolate, Apple’s iPod and Microsoft’s upcoming Zune player will make the back-to-school and holiday seasons competitive for the Stiletto.
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