One out of four new cars sold in America and Canada will be wired for satellite radio this year—surprising analysts who remain skeptical about the technology’s staying power. Most of those vehicles will be given free trial-period subscriptions. It is estimated that only one-third of those owners will switch to paid subscriptions once their trial periods have ended. Sirius reported that its number of OEM and rental-car subscribers grew by 138 percent in 2006. XM Radio added nearly one million subscribers to its coffers the same year. Even if federal regulators allow the merger of Sirius and XM to go through, the satellite giants still face formidable challenges.
Hybrid digital radio allows AM and FM stations to broadcast several high-quality channels without charging subscription fees. The biggest threat, however, comes from WiMAX, which allows wireless Internet audio streaming.
Source: AutoWeek
