DETROIT – Fast-growing XM Satellite Radio is on a roll as it plays rock 'n' roll, jazz, classical and many other types of music – in addition to offering comedy, news and sports shows on its 150 channels.
But now XM, which last week signed up its 4 millionth subscriber, is expanding by offering a service that doesn't entertain motorists, but helps them maneuver through traffic.
It's called NavTraffic. Using map screens of vehicles equipped with navigation systems, NavTraffic provides continuously updated traffic information. The program shows areas of accidents, breakdowns and slowdowns. It also indicates estimated time of travel under existing road conditions and suggests alternate routes.
XM radio just signed its 4 millionth subscriber.
With NavTraffic and other services such as real-time stock reports and text messaging, XM is going “beyond audio” and into other growth opportunities, Roderick J. MacKenzie, XM's director-advance applications and services, tells the 2005 Auto Interiors Show here.
NavTraffic currently is available only in two car models: the '05 Acura RL and Cadillac CTS. MacKenzie saysCorp., Motor Co. Ltd. and other auto makers are looking at incorporating the capability in future models.
Although such a high-tech traffic information service is new to the U.S., it has been in use in Japan and European countries since the 1990s.
The U.S. lags behind those nations because “it's a big country,” but also because the technical infrastructure that provides the data is less prevalent here and come from fragmented sources, says MacKenzie.
Such traffic-flow information mainly comes from sensors embedded in major roadways. Those sensors are in greater use in Japan and Europe, the result of active and cohesive governmental programs.
“The U.S. has different approaches by different cities and states,” says MacKenzie. “To pull the data together, we're looking to integrate traffic-gathering technology.”
The plan is to be operational in 50 major U.S. cities opposed to 20 now, he says. “Once you reach 50 major cities, you have most of the traffic problem areas covered.”
In the U.S., sensors originally were buried in roadways by state departments of transportation to gauge traffic flows and determine needs for new roads. Commercial enterprises are now filling in the gaps in the fragmented system of sensors in the U.S.
“We're dependent on the sensors” for NavTraffic to work effectively, says MacKenzie, who credits Los Angeles with having the best sensor system along its tangle of freeways.
In addition to the sensors, testing is under way to develop other sources of timely traffic information.
That includes dispatching human observers to verify traffic conditions.
It also includes monitoring transmitted signals from motorists' cell phones to determine collective traffic speeds on particular roadways.
Cost of NavTraffic is $3.99 a month, in addition to XM's base $12.95 a month subscriber fee.
Total subscribers to XM and its competitor, Sirius Satellite Radio, are estimated to exceed 8 million by the end of 2005.
Barely three years old, satellite radio “is the fastest-growing audio technology in history,” MacKenzie says.
Although its non-automotive applications are growing (including availability through home entertainment systems and to passengers on AirTran Airways), satellite radio remains closely aligned to auto makers. More of them are factory-installing receivers.
MacKenzie says there was an initial concern among auto makers that the receivers would quickly become outdated – as car phones did when auto makers ventured into telematics last decade.
“But our receivers will continue to work and not become obsolete,” says MacKenzie. “We'll never 'obsolete' them.”
Besides, XM is more interested in signing up paying subscribers than selling hardware, he says.
“Auto manufacturers initially didn't know how to treat us,” he says. “They treated us like vendors at first, but we really weren't selling them anything. Now they look at us as technology partners.”
Much of satellite radio's customer lure is its near absence of commercials. “That's a key selling proposition,” says MacKenzie.
But commercial radio is fighting back in various ways, including an impending move to digital broadcasting that offers FM sound quality comparable to CDs.
MacKenzie acknowledges that satellite radio's sound “is not CD quality, but it is so close most people can't tell the difference.”
Of the looming battle between commercial and satellite radio, he says: “We don't think we will replace terrestrial radio stations, but we are making them think twice about what customers want.”