Earlier today, Steve Jobs wrote a long open-letter on apple.com that he titled “Thoughts on Music”. The letter details his thoughts on encrypting music with DRM and why Apple does not want to license out its FairPlay DRM.

One point that he addresses at the end is that it would not only be very beneficial for the record companies to get rid of DRM, but that “Apple would embrace it in a heartbeat”. It would mean that all downloads would be unprotected, could be played on virtually any MP3 player and bought from any music store. As Steve Jobs notes: “2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free and unprotected on CDs by the music companies themselves”. Doing this would only make online music the same type that you get on a CD: unprotected.

This could easily benefit Sirius, as well as XM. With this happening suddenly people can buy music in iTunes, then load it onto their Stiletto or S50. Suddenly those who don’t want a portable satellite radio player because they want something that can play iTunes will have a choice. It will also make the satellite radio companies and their hardware partners step up even more, as they will want to market their devices to more than just the people who are actively interested in satellite radio. Instead of having an MP3 player be a side benefit to the satellite radio, they can make satellite radio a side benefit to unlocked MP3 players.

I’ve always felt that Apple’s iPod is the single largest competitor to SIRIUS - even bigger than XM or terrestrial radio.

The road got a little steeper Tuesday, as Apple Computer signed with six major airlines to let passengers play video and music from their iPod digital devices on in-flight entertainment systems beginning in mid-2007.

Air France, Continental Airlines, Delta Air Lines, Emirates, KLM and United Airlines will begin offering their passengers iPod seat connections, which power and charge iPods during flight and allow the video content on the devices to be viewed on seat-back displays, Apple said.

XM is already partnered with the widely loved JetBlue, which also offers Directv on seatback screens.

With iPod hookups growing toward ubiquity every day, in cars and now airlines, SIRIUS would be well served to get in more “idle spaces” - the place between home and work - whether it’s a plane, taxi, rental car or subway.

Comment here and let us know where SIRIUS should go next.