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Old 12-13-2006, 10:44 AM   #1
Whiskerbiscuit
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Default 2007 ... More butt ugly !

Bridge sees Q4 off about 35% YOY.

From what I've read, it looks like OEM sales may increase about 10% over last year as adoption continues to be tedious. Rounding things off it looks like 2007 may produce 2.0 million net subs +/- each for both Sirius and XM.

This will put roughly 220 million in the coffers each, which suggests a profit won't be turned by anyone until Q3 2008 at best.

Yes, Mel screw your CFBE. We count money here.

IF the market matures at 20 million ( 2008 ) XM stock holders would stand to gain the most. At that point, earnings may be $1.00 per share making the stock valued at 16-18 bucks tops.

Sirius has a problem with dilution. Whatever it earns, it will be diluted by a factor of six as compared to XM. It's shares are also 1/4-1/3 the price negating some of that dilution.

In the end, both of these excellent companies have hobbled themselves into investor uselessness much to the assured delight of competitive companies and technologies. We yammer about who's got what without stepping back to see the industry in many cases IMHO.

Regardless of your opinion of the potential, from an investor standpoint, they are useless as sawdust separated. As valuable as platinum combined. A strange dichotomy.



The Bridge Ratings Consumer Trend Report: Satellite Radio Q4 Subscriber Trending

Updated Wednesday December 6, 2006

Holiday Shoppers: Satellite Radio Not High on Their Lists

Bridge Ratings' trending of Satellite Radio subscribers continues through 2006. The purpose of this on-going study
is to analyze consumer preferences related to satellite service brand and satellite radio in general.

Bridge Ratings interviews consumers at retail outlets who have purchased Satellite radio. Consumers are interviewed
when entering audio departments to determine their purchase intent and then again post-purchase. By matching pre-purchase
interest against actual purchase, we are able to determine: a) brand potency and b) brand awareness-to-purchase
effectiveness, i.e. the brand's ability to convert awareness to purchase.

This Week's Update:

Retail sales continue to pace behind 2005 for satellite radio as this week' retail traffic in satellite radio departments around
the country was down slightly from last week's improved activity. Sirius continues its dominance of what retail interest there
is though XM has improved its brand scores over the last few weeks primarily due to solid advertising and market support and
clever stealth marketing.

Starting this week, Bridge Ratings has begun asking retail shoppers to provide a list of their top 10 "wish list" electronic items. From
the 4000 national sample this week, 23% were willing to provide their electronic wish list from a list of 48 items. Of the 920 persons
who responded to this questionnaire, 54% were female, 46% were male with the following age breakdown:

12-17 23%
18-24 20%
25-34 17%
35-49 25%
50+ 15%

Composite Top 10 List

1. Apple Video iPod
2. Digital Camera
3. Portable DVD Player
4. Apple iPod Nano
5. GPS Navigation Device
6. Camcorder
7. Apple Shuffle
8. Plasma TV
9. DVD's
10. Cell Phone

Satellite radio ranked 45th out of 48.

Retail floor traffic this week in the variety of stores* we visit each week was down approximately 8% from last week's pace
suggesting that what little momentum Thanksgiving weekend created was not sustainable.

"Brand Stimulation" Part of the Problem

As part of this quarter's qualitative research Bridge Ratings is conducting with potential satellite radio consumers, a "brand
stimulation" study is underway, the results of which will be published after the first of the year. In this study, consumer interest
satellite radio is waning primarily due to three factors the mass radio audience considers important:

1. "What's in it for me?" - A clear and unique benefit
2. How strong are the negative attributes of the current 'brand preference' - In the case of satellite radio, 'brand preference' refers to
the emotional use attachment the consumer has to traditional radio.
3. The "level of demand" created by the degree of attractiveness of the brand's product line.

Bridge Ratings measures each of these first two attributes which generates a "level of demand" quotient that we can track over time.
Satellite radio as an industry, brand and product has seen a significant downtrend in this quotient since April 2006. At this time, it is
at its lowest point reflecting increasing disinterest in the product over time by the general consumer base. This slowing "brand
stimulation" is at the heart of the sector's marketing strategy which we don't see improving anytime soon unless new marketing
strategies are introduced.

Analysts & CEO's See it Too

Wall Street is very much aware of the slow down in sales of subscriptions at satellite radio with recent projections pointing to
a year-end 20% shortfall from original sector forecasts. Sirius CEO Mel Karmazin waited until after the stock market closed on
Monday (Dec. 4) to reduce the satcaster's subscriber forecast for the year to between 5.9 million and 6.1 million. Last month
Sirius said it expected to end 2006 with as many as 6.3 million subscribers. These numbers align with Bridge Ratings' original forecasts published in early November.

"While strong, this year's retail sales results since the Thanksgiving weekend have not been at the pace we had anticipated,"
said Karmazin in a statement. "We are updating our year-end 2006 subscriber guidance to between 5.9 million and 6.1 million.
At the lower end of our range we will still add almost 20% more subscribers in 2006 than we did in 2005, a record year for Sirius.
We have consistently focused on disciplined growth and continue that focus as we look to generate positive free cash flow this
quarter."

The guidance range represents total net subscriber additions of approximately 2.6 million to 2.8 million in 2006, or year-over-year
subscriber growth of approximately 80% to 85%.

Younger Demographics Are Interested in Other Things

In anticipation of the major shopping weeks of the year, we were expecting a better showing from the youth demographic
of 18-21 year olds who heretofore had shown little interest in satellite radio. Interviewing prior to the "Black Friday" shopping
weekend had indicated that this youth group was beginning to show interest in satellite radio, if only from the perspective of
being on the receiving end this gift-giving season. However, this interest did not translate into specific buy behavior this past
week. In our survey of shopping consumer this week, satellite radio ranked 45th overall, but did not appear on any top 20 list of
consumers 12-24 years of age.

While retail sales of satellite systems is far below the activity of a year ago, the sector's potential sales growth now lies in OEM
auto installation heading in to 2007.

Overall Shopping Mood

Based on interviews this week actual overall shopping activity this week, there are strong signs that the health of the next
phase of holiday shopping activity point to overall solid retail growth of a 4.8% to 7% improvement over the same
period last year, however this growth will not include satellite radio. At this time, Bridge Ratings is projecting at 25% decline
in satellite radio retail activity this quarter when compared to Q4 of 2005.

During Q4 of 2005, Sirius added 1.1 million new subscribers - XM added another 898,315 for a total sector addition of 2 million
for the quarter. Based on estimates by both companies projections for Q4 2006 are now : Sirius 881 thousand, XM 500,000 (1.3 million
for Q4). Bridge Ratings is projecting sales will be off 700,000 units from last year at this time. (-35%)
compared to Q4 2005.
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