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Sirius XM Radio (SIRI)
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SIRI » Topics » Demand for XMs service may be insufficient for it to become profitable.

This excerpt taken from the SIRI 10-Q filed Nov 12, 2008.

Demand for XM’s service may be insufficient for it to become profitable.

XM cannot estimate with any certainty whether consumer demand for its service will be sufficient for it to continue to increase the number of its subscribers at projected rates. XM has seen a significant decrease in new subscription demand from retail subscribers and most of its new subscription growth has come from OEMs, which have also recently seen sales drop dramatically.

Among other things, continuing and increased consumer acceptance of XM radio will depend on:

 

  •  

the willingness of consumers, on a mass-market basis, to pay subscription fees to obtain radio service rather than obtain their desired programming from other sources;

 

  •  

the cost, features and availability of XM radios; and

 

  •  

the marketing and pricing strategies that XM employs and that are employed by its competitors.

If demand for XM’s products and service does not continue to increase, XM may not be able to generate enough revenues to generate positive cash flow or to become profitable.

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