Computerworld: Will Apple kill satellite radio?

ComputerWorld has an interesting item this morning by Mike Elgan. It speculates about new features in the anticipated iPhone coming this summer, including an FM transmitter to send iPhone audio to a car radio. It's also thought that the new 3.0 software will enable stereo bluetooth streaming to a car suitably equipped.

There's no doubt that these features might convince many to either skip satellite radio, or to not renew current contracts.

All that is bad news for Sirius/XM, but the newly merged companies have done plenty to shoot themselves. Many subscribers think the merger was badly done, and many favorite channels were killed with no notice. As an XM subscriber I experienced that first hand when no heads up was given to customers about massive channel changes until the day of the switch last fall. For a communications company, that's pretty poor communications.

With an iPhone that can stream stereo Bluetooth, services like Pandora, LastFM, AOL Radio, and Simplify Media become more mobile in the car. I'd have to think twice about renewing XM or Sirius. Although new car sales are in the dumper, a great many new vehicles are delivered with iPod adapters, giving even more impetus for users to take their own music with them rather than to be stuck with a costly, and seemingly diminishing satellite radio service.

The whole theory behind Sirius/XM was to get radio worth paying for. To a degree, the iPhone and iPod have changed that equation, because you can take your favorite music with you, either your own or music from the new streaming music services. But getting the music into your car audio system was a chore if you weren't pre-wired for it. If indeed Apple makes the integration of the iPhone into the car easier, I think satellite radio will have to re-think its business plan, a plan that is already in tatters.

How about you? Do you subscribe to Sirius/XM now? Has the economy changed your plans? Would new options to get iPhone audio on your car make you think again about that costly subscription plan?