Should Apple buy Sirius XM?

Last Friday, Jim Cramer, host of CNBC’s Mad Money “said Apple should buy satellite radio operator Sirius XM Holdings to bolster its fast-growing services business,” Patrick Seitz reports for Investor’s Business Daily. “Sirius would strengthen Apple’s position in the subscription-based music business, where it has a foothold with its Apple Music streaming service. Sirius also would give Apple a major presence in the automotive infotainment sector, Cramer said.”

“‘Anything that puts Apple on the path toward owning the automobile would really brighten the company’s long-term outlook,’ Cramer said,” Seitz reports. “Apple ended the June quarter with $231.5 billion in cash and securities. ‘Every six months, Apple spends the equivalent of Sirius XM’s entire market cap on buying back its own stock, and they have got more than $230 billion just lying around,’ Cramer said. Sirius has a market cap of about $20 billion.”

Read more in the full article here.

MacDailyNews Take: We don’t see Apple ponying up the $40 billion or so it would take to buy a business that they are effectively working to replace with Apple Music and streaming content. If you’re listening to Apple Music via CarPlay, you’re not listening to Sirius XM. It would be cheaper for Apple to lure away the exclusive draws on Sirius XM (one example: Chris “Mad Dog” Russo) than to buy the whole kit and caboodle. All of Sirius XM’s music channels are already obviated by Apple Music.

Why Apple should buy Sirius XM – May 13, 2013
SIRIUS and XM to combine in $13 billion merger – February 19, 2007


    1. It would be interesting seeing the balance between satellite listening and internet listening to Sirius. My guess is internet is gradually growing. When you couple the replacement costs of the satellite constellation and the incredicrappy sound from the satellite feed, Apple should run away.

  1. It would make much more sense to return to the idea of Apple becoming a MVNO (Mobile Virtual Network Operator) and offer unlimited streaming as part of a subscription package for iCloud/iTunes/Apple Music. The usefulness of carrier relationships in the US is gone for Apple since they no longer subsidize the iPhone anyway

    1. I live 65 miles northwest of Chicago. Even this close to such a large city, there are MANY areas where there is no cell coverage, so I lose access to Apple Radio in my car. Sirius, however, is available everywhere except when I am in a place with significant overhead obstruction. If the coverage gaps in cellular transmission are resolved, then great, I won’t need Sirius. But that may be a long time in coming, as there are many sparsely populated ares in the US where poor cell coverage is the norm. For Apple Radio to reach full potential, it has to be available everywhere. I don’t know of a cost effective solution to that problem except for satellite broadcasting.

    2. I drove halfway across Texas yesterday, mostly on an interstate highway. I had SiriusXM coverage for every one of the 590 miles. AT&T provided 4G or better coverage for less than 50 miles inside the few cities enroute. There was 3G coverage for perhaps another 30 or 40 and EDGE a few beyond that.

      That leaves 500 miles (almost 8 hours of driving) with no signal sufficient for streaming. People in Central and West Texas who don’t live close to a major highway never have a signal adequate for much more than a telephone call or texting.

      The MDN commentators need to remember that the great bulk of America’s area has spotty cell service, no fiber, and only limited copper Internet access. That is true even of my hometown, which is only 35 miles from the second-largest concentration of Apple employees in North America.

      We are not all urban hipsters with high tech at our fingertips. Cutting the cable for video or going to all-streaming for audio are just not technically feasible yet for those of us who live in what you probably think of as “fly-over country.”

      For us, Apple’s acquisition of an adequate content delivery system would be a huge step forward. I doubt they would ever do it, since it would put them in competition with the wireless providers, but it isn’t a completely nutty idea.

    1. Not true. You get multiple radio discount after the first one. Still stupid expensive after the discount. I have 4 on subscription.

      As our family collectively spends probably 150+ hours in the car every month, I think streaming data would be just as expensive

    2. I purchased a lifetime membership to Sirius in 2006 and paid approximately $500 at the time. My friends thought I was crazy, but I was looking at total cost. My break-even was around 3-1/2 years using the best rates at the time for annual memberships. It’s now 10 years later and I just transferred my membership to my wife’s new 2017 Hyundai Sante Fe. I’d say I got my money’s worth, especially since Sirius stopped selling that plan years ago.

      I do however have a few gripes. The “Lifetime” membership isn’t really a true lifetime membership. It is only good on your current radio ID and can only be transferred 3 times. And for each transfer, Sirius charges a BS $75 transfer fee. I’m on my last transfer but since I usually keep cars 10 years, this may last me until 2026.

  2. actually, i’d be all for it. siriusxm is already in just about every car so that gets apple an automatic in with any car built in the last 5 years. that would be big. plus, the 80s on 8 channel has the original mtv vjs – that alone is reason enough

      1. That’s because new music sucks. I love the 80s channel and seriously Sinatra and classic radio which is something you can’t get anywhere else. Love listening to the old radio shows.
        I wish they had higher bandwidth on it and seems some radios have better sound then others.
        But I think they do need to work on a plan to upgrade to a higher bandwidth or better audio compression.
        But I enjoy it non the less and it’s far better then anything I get with Apple Music.

        Apple Music is only for the top 40 crowd really

  3. I think MDM is missing the point here a bit. Yes Apple Music and SirusXM are in parallel business as far as content, but what buying SirusXM would give Apple is a content delivery system that reaches every square inch of North America, something Cellular cannot. After all, SirusXM is only delivering a data stream. Owning this technology would give Apple another way to get data to users. And to have a better bargaining chip against the wireless carriers.

    1. Not “every square inch.” I get a lot of dropouts in all kinds of terrain in lower upstate NY….

      And while I think Jim Cramer’s wrong more often than he’s right (entertaining nonsense said loudly is his forte), it is another pipe… …and a place to put their own radio station(s) which could be lures for Apple Music subs.

      So there could be synergies. But, no, it ain’t gonna happen.

    1. BOB, you are repeating this 80% to death on multiple threads. Not going to happen. Ever. Wall street would be even less impressed with Apple if they said they were going to do this. It would be proof to the naysayers that Apple had no ideas to invest in.

      1. That’s why you need to tell them and be very clear that you invest in a business to make money for you. Tell them that the measure of how well a company is doing is not gee-wis new product that a company comes out with but how much money that company can make it’s investors.

        (think bottled water)

        It does not matter. All publicly traded businesses should pay 80% of the profits to shareholder.

        Make your 401-k grow faster so you can get off the field so some new kids can play.

        Look at age 40 companies start to look to get rid of you anyway, you cost too much. ( salary, health care, time demands, opinions, etc ) So they start the crap, in the old days… just a few years ago…, the government is forcing us to … hirer minorities, comply with new regulations, pay more taxes, or it’s the unions… on and on and on just to turn around and hirer a fresh face (maybe not a kid) and pay them less money. ( deaf, dumb, and blind comes to mind )

        Only the guy/lady that owns (figuratively writing) the company tells the shareholders and workers they do need, sorry, deserve any of “his/her” money.

        My point, I hope more people demand 80%; see, if they work at a publicly traded company and own shares, they really get a chance to make money from the fruit of their hard work. Perhaps, for those who hate unions, this idea scratches their itch, there will be no need for a union, no need for bonuses.

        CEO’s don’t have to populate the boards of directors with yes people. The bonus for the CEO is in the 80%. The more money the company makes the more money he/she makes, dependent only on the shares he or she purchased. No crazy, in order for us to fire you, here is 20 million dollars cause you could make a dime, now we need that office please stuff.

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