HolidayBuyer's Guide

Sirius radio takes a ride with Mercedes

Automaker will offer satellite radios tuned to the Sirius service in its 2005 models. Photo: Sirius and Mercedes team up

Imagine Howard Stern riding shotgun in your SL600 convertible.

That image--surely a fantasy for some--will come to life with Wednesday's announcement from Mercedes-Benz that it will offer Sirius satellite radios factory-installed in nearly all 2005 models.

Sirius, which threw the satellite radio race into new orbit last month by snagging popular shock jock Stern, has counted Daimler-Chrysler as a manufacturing partner for years. But the automaker previously only offered to equip vehicles with the wiring needed for a Sirius receiver--dealers had to do the actual installation.

Sirius and market leader XM Satellite Radio emerged on the market about three years ago with similar technologies and business plans. Both charge a monthly fee to let subscribers access dozens of channels of original audio programming beamed directly by satellite to special receivers in cars and home stereo systems.

Support from automakers is regarded as a key factor in popularizing satellite radio, as consumers are far more likely to splurge for a receiver as an extra feature in a new car than buy and install a unit in a car they already have. XM has exclusive deals with General Motors, Honda and Toyota. Along with DaimlerChrysler, Sirius has exclusive arrangements with Ford, BMW, Mazda and Volvo.

Broader support from Mercedes brings Sirius one step closer to the ultimate destination for both satellite services, said April Horace, an analyst for Janco Partners. "The goal with all of the car manufacturers is to become a factory-installed option and ultimately become a standard feature," Horace said. "This is a positive, incremental move for Sirius."

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