Rumor has it that Directed Electronics and Sirius XM Radio Inc. will be parting ways next year, Orbitcast has learned.
DEI Holdings Inc. (formally Directed Electronics Inc.) will no longer be the satellite radio distribution source for Sirius, according to people familiar with the matter. The two companies are said to be splitting up once the contract runs out in January 2009, these people said.
An official announcement is expected to be made sometime in the near future, possibly as soon as today.
UPDATE: The official press release was issued shortly after market close. Click the jump to read the full announcement...
Directed Electronics to Exit Satellite Radio Business
* Focus to return exclusively to security and entertainment products
* Company expects exit to result in recovery of working capital, reduction of debt, and increased gross margins
VISTA, Calif., Nov. 5 /PRNewswire-FirstCall/ -- Directed Electronics, an operating unit of DEI Holdings, Inc. (NASDAQ:DEIX) , today announced that it has entered into an agreement with SIRIUS XM Radio outlining key terms for winding down their business together by January 31, 2009, the expiration date of the current distribution agreement.
Jim Minarik, DEI Holdings' President and CEO stated, "We became the primary retail distribution partner for what was then SIRIUS SATELLITE RADIO in 2004, and are proud of the results we have achieved by growing SIRIUS' satellite radio retail share from approximately 20% to over 60% during the past four years. However, based on the large working capital commitment required for this business, as well as a strategic decision on our part to focus on our core security and entertainment businesses, we will not be extending our current agreement with SIRIUS XM when it expires on January 31, 2009. We have enjoyed an excellent partnership with SIRIUS over the past four years and expect to continue working closely with them to ensure the smoothest possible transition to their new distribution partner between now and early 2009."
The agreement specifies that SIRIUS or its new distribution partner will purchase substantially all remaining satellite radio receiver inventory from Directed in the first quarter of 2009 and assume full responsibility for all product returns and warranty costs after January 31, 2009, regardless of when the product was sold.
Mike Simmons, President of Directed Electronics said, "While our role as SIRIUS' primary retail partner over the past four years has benefited Directed, it has also diluted our team's focus on our core security and entertainment businesses, sold principally under our Viper, Python, Clifford, and Orion brand names. Going forward, we are excited to be able to once again dedicate 100% of our attention to improving the experience, service, and innovation we deliver to our customers."
Kevin Duffy, DEI Holdings', CFO commented, "Exiting the satellite radio business will allow us to focus on our core categories and also increase our ability to pay down debt by recovering the $20 to $25 million of working capital we have committed to this business."
* Focus to return exclusively to security and entertainment products
* Company expects exit to result in recovery of working capital, reduction of debt, and increased gross margins
VISTA, Calif., Nov. 5 /PRNewswire-FirstCall/ -- Directed Electronics, an operating unit of DEI Holdings, Inc. (NASDAQ:DEIX) , today announced that it has entered into an agreement with SIRIUS XM Radio outlining key terms for winding down their business together by January 31, 2009, the expiration date of the current distribution agreement.
Jim Minarik, DEI Holdings' President and CEO stated, "We became the primary retail distribution partner for what was then SIRIUS SATELLITE RADIO in 2004, and are proud of the results we have achieved by growing SIRIUS' satellite radio retail share from approximately 20% to over 60% during the past four years. However, based on the large working capital commitment required for this business, as well as a strategic decision on our part to focus on our core security and entertainment businesses, we will not be extending our current agreement with SIRIUS XM when it expires on January 31, 2009. We have enjoyed an excellent partnership with SIRIUS over the past four years and expect to continue working closely with them to ensure the smoothest possible transition to their new distribution partner between now and early 2009."
The agreement specifies that SIRIUS or its new distribution partner will purchase substantially all remaining satellite radio receiver inventory from Directed in the first quarter of 2009 and assume full responsibility for all product returns and warranty costs after January 31, 2009, regardless of when the product was sold.
Mike Simmons, President of Directed Electronics said, "While our role as SIRIUS' primary retail partner over the past four years has benefited Directed, it has also diluted our team's focus on our core security and entertainment businesses, sold principally under our Viper, Python, Clifford, and Orion brand names. Going forward, we are excited to be able to once again dedicate 100% of our attention to improving the experience, service, and innovation we deliver to our customers."
Kevin Duffy, DEI Holdings', CFO commented, "Exiting the satellite radio business will allow us to focus on our core categories and also increase our ability to pay down debt by recovering the $20 to $25 million of working capital we have committed to this business."
Thank god! I have never been very impressed with Sirius Radios. XM always had better radios. Hopefully they will open it up to other manufacturers like it was when Sirius first came out. I had the original JVC radio, It was buky, and had its own problems, but it was nice.
Would be great to see Pioneer create new Radios that will work with Sirius subs..
DEI probably told Sirius it no longer wanted to be paid in worthless stock. I am guessing that DEI has seen the end of satellite radio and is moving on to making things that sell far better, like toaster ovens, coffee makers, etc.
Slacker is going to put a huge hurting on satellite radio. It's got everything but news and sports. I've got a couple of HD sets for that.
Jeff T. I am nit sure if you read the post but DEI is NOT the manufacturer, creater, etc of sirius radios. They are a supplier/distributor of the radios.
- You realize that your old JVC Sirius radio was a Directed product, right?
Guess not.
Sirius radios were always at a disadvantage due to the heat and size of the chipset. Around the SP4, ST4 time I think they actually pulled ahead of the XM plug and plays for a while (not portables) but then XM stepped up to a higher resolution display in their PnPs and they took the lead again.
Wonder who will replace directed?
DEI makes junk products anyway. maybe an electronics company with a clue can make these things so they actually work??? maybe????
I will miss the "Cool Look" of the S50 and Stiletto radio's made by directed, but will hope for a manufacturer that has more quality built in. Both these radio's did not stand up at all to the heat of cars or the abuse of its readio listeners. They all seemed to barely last as long as the "Next Model Year".
Did not realize the JVC radio was a DEI radio. I know they did not CREATE the radios, but they built them right? Wasnt there a story recently about the DEI factory having slave labor?
None the less, I hope they come out with better radios next year. I have a starmate 3 which never worked well since I got it. I have been holding off on getting a new one till they actually came out with on that is worth the money.
it is pioneer I bet!! here is old . link for a clue
http://www.streetinsider.com/Corporate+News/SIRIUS+XM+Radio+(Nasdaq:+SIRI)+and+Pioneer+Electronics+Introduce+XMp3+Wearable+Satellite+Radio+and+MP3+Player+/4072316.html
Okay. So lets say we have a universal boombox... and no radios come out. Will they all still work if they arn't from Directed?
Hallelujah!!! Thank you Jesus!!!
Actually the current radios are made by Wistron NeWeb Corp:
http://www.wneweb.com/Satcom/Satellite_R.htm
Many radios for Sirius are made by Kiryung Electronics Korea. Wistron has made some stuff for Sirius in the past, as has some other companies. Kiryung represents the majority of Sirius radio models though.
There is no reason for DEI to continue to make radio's for siriusxm, with the massive drop in subscriber numbers and siriusxm with over 1Billion of debt siriusxm is going to be history soon enough. We will see more and more manufactures, talent and content "spliting" from satradio moving back to the greener pastures of AM/FM HD and Internet radio.
DEIN should be making the Slacker Personal Radio. I see very good things for this as satrad is a has been fad.
Slacker playing now in my office. I think I'll add a new channel. When I'm tired of it, I'll delete it and startd again.
AHHHHHHHHHHH.......Synergies.
Ahhhhhh............Synergies!!
Now we have a manufacture that produces ALL radios!! That reduces cost with quantity,volume and distribution!!
Get ready for upgraded guidance on ARPU!!
This saves tons folks!!
"siriusxm is going to be history soon enough. "
When the obamaphiles reenact the unFairness doctrine, many popular conservative talk programs are going to loose many of their affiliates. People will only be able to get this programming on Sat Rad. It may be what saves sat rad.
DEI aka Directed Electronics is getting out of the satellite radio making business and moving on and up to making HD Radio's. DEI (as many other manufactures in the past) has seen the reality of the future of SiriusXM and they are acting accordingly and dropping this turd of a industry. Satradio will continue to get smaller and smaller till SiriusXM goes completely belly up.
While officially as an employee I must refrain from trash talking DEI products, I will say that I share your hopes that SiriusXM will open up the market to other (hopefully) better manufacturers. We do not have nearly the volume of calls related to equipment failures of the older units such as Sanyo, JVC, etc. I would like to see more competition and greater variety in features as this will drive the prices of hardware down, levels of customer satisfaction higher, and an overall increase in the number of subscribers.
?
you are clueless.