iBiquity presented yesterday at the Radio Symposium 2007, and appears to be poised for a major push in services and offerings in the near future.

Bear Stearns analyst Robert Peck, in a recent note to clients, listed several key takeaways from the presentation:

New Services:

• HD Radio is planning on offering features like enhanced PAD data to show sports scores, stock tickers, and even text-ads.
  
• On-demand radio, including traffic and weather
• Time-shifting capabilities with pause, record and playback functionality
• The ability to purchase music
• Subscription or opt-in services

More Stations:

• There are currently over 1,300 HD Radio stations nationwide, covering 82% of the U.S. population
• iBiquity is expecting 5,700 HD Radio stations by 2011.

The Apple iPhone is coming, and starting this Friday at 6pm, the audio industry is going to change forever. It's not going to happen overnight of course, and everyone (including Apple) knows this. But kidding yourself if you don't think there isn't an evolutionary roadmap already laid out for future versions of the iPhone. This Friday is just setting the stage.

Even if Steve Jobs reaches his goal of 1% of the worldwide cellphone market (that's 10 million units by the way) in 2008 - and I fully expect that he will - the real impact will be felt in 2010 and beyond, when the mobile audio market has matured to something completely different than it is today.

Planned Obsolescence
Apple's slogan should be "We Plan Obsolescence" because they are absolute pros at it. They are masters are creating desire, and continuously getting consumers to plunk down enormous amounts of cash to feed that desire. There's some key features missing from the iPhone - most notably 3G - but I think this was done with a clear plan of making the device accessible to the public.

The early adopters will buy it no matter what, even with dog-slow EDGE and the lack of MMS. Because Apple sells "sex" like no other. The iPhone is sexy. It's also ridiculously expensive. The majority of the people who want the iPhone, can't buy it.

And that makes it even sexier. We always want what we can't have. The iPhone is the femme-fatalle of consumer electronics.

Over-the-air isn't important... yet.
The lack of 3G also allows for Apple to continue to feed it's iTunes business model. Apple has effectively said with this device that over-the-air downloads are not important... yet. The reality? They're right. And the 130 million MP3 players prove this. People have built up vast collections of music on their computers, and spent a lot of effort doing so... they're not willing to part with them just yet.

But when the 3G version comes out, all the early adopters will rush to buy that version. Remember,  she's the femme-fatalle.

Apple will then be able to sell the "old" iPhone for a lower price. Those who couldn't afford the $500 iPhone will jump to get it at $300. And just as Apple opened up the door for iPod owners by selling an MP3 player without a screen, they'll create an entry-level market for people who will lust after a 2.5G cell phone.

The 3G iPhone will subsequently set the stage for Apple's over-the-air music service. Apple will most definitely have a Mobile iTunes as a result of the iPhone. But they need the infrastructure to be there first. And the right terms.

Radio being "live" isn't always a benefit
Right now, the only saving grace for the radio industry - and that includes terrestrial radio and satellite radio - is that "live" content can be received while on-the-go. The reality is that most of the content we listen to isn't really "live" anyway (most folks on the West Coast know exactly what I'm talking about).

And in a time-shifted TiVo world, we've become more and more accustomed to consuming displaced content. For a growing number of people, "live" actually has a negative connotation... because there's no control. You can't skip commercials. You can't jump to the next section. You only consume "live" content because you forgot to schedule a recording.

Apple knows this (they've helped foster a time-shifted culture afterall) and that's why the iPhone is currently dependent on side-loading content. Eventually, it's not a hard leap of effort for Apple to allow you to access your iTunes library over a cellular network. Music, talk - and yes even news, weather and traffic - will easily be downloaded to the device, for listening in your own accord. It'll probably be a lot like Slacker, in that you're not listening to streaming content, just cached content.

And for most, there's little difference.

The only thing that being "live" contributes, is the ability for listener interaction. But with terrestrial radio listening on the decline, and the growth satellite radio slowing a little sooner than expected, it's obvious that the general consumer is willing to give up that interactivity for control.

But hey, that's all just pipe dreams. This Friday is the reality. As a big, keyboard-less, extremely-expensive, and slow-ass 2.5G device goes to market.

There's nothing to worry about from that... right?

Walt Mossberg of the Wall Street Journal and David Pogue of the New York Times have both weighed in on the upcoming iPhone.

Mossberg's verdict:

"...despite some flaws and feature omissions, the iPhone is, on balance, a beautiful and breakthrough handheld computer."

Pogue's verdict: 

"As it turns out, much of the hype and some of the criticisms are justified. The iPhone is revolutionary; it’s flawed. It’s substance; it’s style. It does things no phone has ever done before; it lacks features found even on the most basic phones."

You can read Walt Mossberg's 2-week review here, and Pogue's here. Or you can watch Mossberg's video review:

What does this have to do with satellite radio? Everything.

The Wall Street Journal's Sarah McBride (who is, by far, my favorite reporter in this beat) took an in depth look at the growing space of Internet radio and it's evolution into the untethered space.

Profiling devices like the Sansa Connect, to Pandora's deal with Sprint (and their Wifi device), and of course, Slacker - the WSJ article does a pretty damn good job at looking at this rapidly emerging market. Lest we forget that terrestrial radio isn't sitting idly by, with CBS having recently acquired Last.fm and accounting for some 20% of all online radio listening.

A good chunk of the article is devoted to profiling Slacker as well as their upcoming portable device and satellite-powered car dock. One thing that we learn (well, it's news to me) is that the Slacker satellite "radio" antenna will measure in at about 4-inches. Their satellite service, because it isn't necessarily streaming (more like caching), will not initially feature newscasts, traffic reports or sports scores.

It's a good read if you have a WSJ account.

[Wall Street Journal] 

Some hopefuls were praying that XM Radio Mobile, which provides 25 XM channels to AT&T wireless, would be an included application in the upcoming Apple iPhone. Details were shady on whether AT&T's MEdia Mall would be included which then left open the possibility of XM Radio Mobile being included. But...

It turns out that a (supposedly) leaked Sales Training Workbook reveals that MEdia Mall, MEdia Net, MobiTV and Cellular Video will not be included. So that closes the book on that one.

Hope you weren't surprised.  

Besides the fact that the iPhone is only EDGE enabled, and XM Radio Mobile requires a large amounts of bandwidth to be usable. That still leaves the door ajar for XM Radio Mobile inclusion in the next 3G enabled iPhone (which is rumored to already be in the works).

[Engadget] 

NPD Group reports that music enabled phone sales, and the usage of the MP3 player functionality of these phones, is up dramatically since Q2 of last year.

Sales of music enabled cellphones has grown from 18% in the second quarter of 2006, to more than 38% in the first quarter of 2007. That's a growth rate of 111% in under a year.

Of course, simply selling an MP3-capable mobile phone means nothing if no one is using it. But that's not the case either. MP3 player functionality usage is now at an all-time high – up 82% since the second quarter of last year. In Q1 2007, about 7% of subscribers used their phones as MP3 players.

If the behavior of the market can grow this quickly in just under a year... what will it be like in 2010? Sirius/XM, are you watching this?

[The NPD Group]
Thanks Tim!

Melodeo, a service that delivers Web-based audio clips to phones, is currently testing a service that streams music to cell phones based on a customer's iTunes playlist.

The new Melodeo service will let consumers listen to their digital music libraries on the go without a portable player. It also lets listeners access songs from their library on more than one PC.

Mind you, Melodeo is not selling copies of songs you to store on your phone - it simply plays the songs contained on your iTunes playlist. That means Melodeo would only have to pay Internet radio usage fees (a tenth of a cent per song play).

"We're doing everything we can to follow the current legal guidelines and standard industry practices where the legal guidelines are not crystal clear," said David Dederer, Melodeo's vice president for music services.

Revenue could come from monthly fees for the service, software download fees, or even audio advertisements, added Dederer.

They expect the first version of the service to launch in 6 to 12 weeks, according to Dederer, who said he hopes to be able to announce a carrier deal by then. (Melodeo currently is partnered with AT&T and Alltel Corp.)

[Billboard.biz]
Thanks Tim!

Last month, ICO Global Communications announced a partnership with Alcatel-Lucent and Hughes Network Systems to launch a mobile video network in two US cities, starting in Spring of 2008.

The "Mobile Interactive Media" service includes in-car video, broadcasting 8-15 channels plus interactive navigation, and other information like emergency voice and test messaging. The mobile video offering will be delivered via satellite and repeater network, and will be offered at a month subscription charge (hmm, sound familiar?).

ICO plans to roll out a more extensive repeater network (somewhere between 1,600 and 2,500 repeaters) with a goal to cover 74% of the US population, in up to 100 US metropolitan areas, starting in 3Q07. Note that ICO isn't targeting the handheld video player market - only the in-vehicle market.

TMF Associates analyst Tim Farrar wrote in a recent report that, "ICO will face competition from Sirius, which already plans to launch a three channel mobile video service later this year, and could conceivably face competition from MediaFLO, as that company builds out its national footprint."

Farrar also considered other potential services that ICO could participate in like "a next generation OnStar service (with an addressable market of several million vehicles) or provide interactive navigation services (again with a potential opportunity of perhaps several million vehicles given the level of competition from other providers)."

TMF estimates that the costs would run up to $100k per repeater (or $250M for the 2,500 repeater network)... which is peanuts considering what XM/Sirius have spent.

But many influentials will go out and buy the iPhone on that day. The people who give tech advice to their friends. The ones who everyone turns to for advice on the latest gadget. Those influentials will be waiting on line for a $600 phone, and will love every minute of it.

Sirius and XM are not in the radio business, they're in the desire business. And when thousands of influentials with their iPhones in hand hit the streets, and show their friends what they can now do, there will be one device that people will desire.

On June 29th, the mobile industry will be forced to react to the iPhone, and as such will be releasing their own convergence devices (they're already working on them, in fact). All these new music players/smartphones will try to take it a step further than Apple... and that includes seamlessly integrating into your car.

And it's less than four weeks away. Don't think it'll be disruptive? Watch these commercials and tell me otherwise.

[via Engadget]