XM Satellite Radio Gets 10-Year Extensions With Carmakers - InformationWeek

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XM Satellite Radio Gets 10-Year Extensions With Carmakers

Two large automakers have agreed to factory-install XM radios in cars well into the next decade.

XM Satellite Radio Holdings says Honda and Toyota have agreed to factory-install XM radios in cars for another 10 years.

The deals are important because XM and its rival Sirius Satellite Radio have targeted carmakers as a key channel for new subscribers.

XM's deal with Toyota Motor Sales USA Inc., announced Wednesday, extends the current partnership through 2017. Toyota offers factory-installed XM radios on Toyota and Lexus models, and expects the number of equipped vehicles to exceed 1 million by 2010, according to XM.

The agreement with Honda Motor Co. Inc. extends the U.S. partnership through 2016. American Honda, which markets Honda and Acura models, expects to have XM radios in 650,000 2007 vehicles. Honda has shipped 1.5 million XM-equipped cars since the partnership began in 2003, Washington, D.C.-based, XM said.

XM and Sirius have been steadily adding subscribers, but both remain unprofitable, despite achieving positive cash flow from operations in the last quarter of 2006. XM ended the year with 7.6 million subscribers, Sirius with slightly more than 6 million.

While the companies remain fierce competitors, some analysts have said a merger is possible. However, it could be difficult to get such a deal approved by government regulators.

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