For the fifth month in a row, year-over-year retail sales are on the downslide (if you're keeping track -- August: -3%; September: -12%; October: -25%; November: -45%) to a whopping 46% decline in year-over-year unit sales for December 2006.

The Quick Glance:

• Sirius December 2006 Retail Sales:
  Down 40% YoY
• XM December 2006 Retail Sales:
  Down 55% YoY

Marketshare:

• Sirius Dec '06 Retail Marketshare: 66%
• XM Dec '06 Retail Marketshare: 34%

The obvious big news here is that XM gave up such a massive amount of retail marketshare to Sirius in December. Sirius definitely executed better in retail (as obvious with their impressive Q4 net subscriber additions as well), but it's still a bit surprising to see XM's retail marketshare down so severely.

Yes, Sirius had a larger number of discounted receivers available during the holiday season than XM, but I think their continued brand exposure (thanks to Stern) probably played a roll in their retail dominance as well. I'd be curious to see if there was any financial downside to get this result though. Regardless, now is a time for Sirius peeps to celebrate, they did a bang-up job last month.

According to theflyonthewall.com, XM and Sirius are expected to make an announcement at the North American International Auto Show in Detroit - today 01/11/2007.

Bank of America analyst Jonathan Jacoby met with XM Management at CES earlier this week, and it is his view that XM is considering the merger option quite seriously. Citigroup analyst Eileen Furukawa after an investor dinner with Gary Parsons also noted a she "sensed an increased openness from XM re: the possibility of merger with Sirius."

Now mind you, there's a big difference between these two companies wanting a merger, and whether it will really happen (see my 5 reasons why it won't happen post). There's many hurdles along the way, especially the "balance of power" between the two companies in this newly formed entity, but this is a clear shift in XM's previous position on the merger itself.

From an investor's standpoint: Bear Stearn analyst Robert Peck said it perfectly in a recent note, "the possibility of a merger has likely been the single most important factor impacting valuations recently."

From a customer's standpoint: is this really the best thing? Who knows, but at this point it's way to early to even consider the implications of a merger actually going through.

The folks over at SSG were kind enough to provide the data of both quarterly and total net subscribers between both Sirius and XM. Using this data, below is a visual look at the year in net subscribers.

2006 Quarterly Net Subscriber Additions: 

The scary part: in terms of net subscriber additions, XM actually performed better in the first quarter of 2006, than in the fourth quarter of 2006. Of course this may not be the case in terms of gross subscribers (read more here) but it's still concerning to say the least.

2006 Total Net Subscribers:
 

Sirius now is nearly at the same point in total subscribers as XM was a year ago. The thing that is blatantly apparent is that Sirius is showing more rapid growth than XM is during the past year. Whether or not Sirius will begin to experience similar "growing pains" that XM experienced this year is hard to say as 2007 is going to be a completely different climate.

But should Sirius and XM continue on exactly the same paths they are following right now - based on only 2006 numbers - they could reach the same number of subscribers in the third quarter of 2007.

[more on SSG] 

Mel Karmazin, Sirius' Superstar CEO, will participate in a keynote lunch discussion at the Citigroup Entertainment, Media and Telecommunications Conference in Las Vegas on Wednesday, January 10th, 2007 at 12:30pm PT (that's 3:30pm ET).

There will be a live webcast of the keynote, accessible here.

Sirius Satellite Radio ended 2006 with roughly 6,024,000 subscribers, effectively adding 2.7 million net subscribers in 2006 (that an 82% increase over the 2005 subscriber base).

Based on preliminary financial data, Sirius also achieved their first quarter of positive free cash flow in the 4Q06. A great show of controlling costs.

Reaching this milestone means that Sirius hit essentially smack-dab in the middle of their revised subscriber guidance for 2006 (which ranged from 5.9 - 6.1 million).

Since they ended 3Q06 with 5.1 million subscribers, this means that they added about 904,692 new net subs for 4Q06 (based on the approximate amount released).

Sirius plans to release their full year 2006 financial results in February.