Stationed to compete on air: satellite radio

For $10 a month, satellite radio offers 100 channels of top-notch sound.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
YOUNGSTOWN -- Phil Kilpatrick knows he can drive as far as he wants and not lose his radio station.
Whatever station he chooses gets locked in for as long as he wants, with no static and often no commercials.
Kilpatrick, who travels as an insurance broker for Kilpatrick Co. of Canfield, is one of the first Mahoning Valley residents to get the latest in high-tech electronic gadgets -- satellite radio.
"It's awesome. I love it," he said.
For the past month, radio programs have been beamed down to his car from a satellite put in orbit by XM Satellite Radio Holdings, the first company to offer service in the United States.
The cost is about $10 a month for service and about $400 for equipment and installation.
It's been well worth the money, said Kilpatrick, who often was frustrated when trying to find something to listen to in other cities.
"You're constantly flipping, and you get tons of commercials," he said.
Sales in the area
Area electronics stores have been selling the systems since XM began its service late last year.
Phase II Electronics has sold about 50 at its Niles store and about 250 more at its stores in Cleveland and Akron, said Noel Hardy, manager of the local store.
Rex Torbron, manager of Doc's Car Audio Systems in Boardman, wouldn't release how many units he's sold but said it's been about what he expected.
Interest is bound to increase because automakers are making them available in new cars, he said.
General Motors began offering it in two Cadillac models in November and this year will offer it as an option in 25 other models. Chrysler announced last week that it was beginning to offer satellite radio as an option on 16 models.
The system
XM has two satellites over the United States that beam down 100 channels of programming. A series of repeaters provides coverage across the country.
Torbron said the satellite radio's digital signals provide sound quality that is far superior to FM radio and cassette tapes and nearly as good as CDs.
Commercial radio stations aren't offered. Instead, XM offers its own music programs, including country, contemporary hits, rock, jazz, urban, dance, Latin, world, classical and children's. More than 30 of these channels are commercial-free.
XM also offers channels with news, sports and comedy.
Its competitor is Sirius Satellite Radio, which is rolling out its service across the country this summer. Sirius, which has three satellites in orbit, is charging about $13 a month for its 100 channels of programming.
The equipment
Consumers also have two hardware options.
They can buy a system that takes the satellite signals directly into the stereo unit. This unit costs about $200 but requires buying a new stereo unit, which displays the artist and title of the song being played. The new stereo would cost a few hundred dollars or more.
The other option is to buy an FM modulator, which allows existing stereos to be used. It comes with a small control device that is used to change stations. The cost is $400, including installation.
Other equipment that is included in either option is an antenna mounted outside the car and a receiver box that's an inch thick, 10 inches long and 6 inches wide and mounted under a seat or the dashboard.
Torbron said 90 percent of buyers are going with the FM modulator because it can be transferred to any other vehicle.
Either way, users can flip back to their regular FM and AM stations. Units also are available for home use.
Waiting for price drop
As has been the case with other electronics, demand will increase dramatically once the hardware and installation price goes down, Hardy said. He figures about $250 will be low enough to bring out a significant number of buyers.
Torbron agreed that cost is all that is holding satellite radio back. He said people who have bought the systems average about 45 or 50 years old.
"They are the ones that have the money," he said.
Buyers have been mostly salesmen, truck drivers and people who have an interest in high-tech gadgets.
Torbron said he sees satellite radio developing like cable television. At first, people will question having to pay for programming they can get for free, but after about 10 years most people will want the advantages in programming and reception, he said.
shilling@vindy.com