Satellite Radio: the Auto Industry's Space Race

The competition between two East Coast-based companies hoping to be the first to market with a groundbreaking convenience item boils down to a blast off sometime in 2000. The payload: satellites that will beam down to cars and trucks up to 100 channels of audio entertainment.

XM Satellite Radio of Washington and CD Radio Inc. of New York, which won the two licenses offered by the Federal Communications Commission during an April 1997 auction, should begin service in late 2000.

CD Radio originally hoped to begin broadcasting in June 2000, months ahead of XM. But delays in the launch of its satellites and delivery of chip sets have pushed back its commercial debut.

"It looks pretty much simultaneously," says an XM spokeswoman of the launch dates.

The companies have developed quite a rivalry, even though they currently are the only competitors in a potentially huge market.

With conventional radio shortcomings in mind, the companies predict immediate success. CD Radio believes it can capture 1.85 million subscribers in its first year of operation. A market research firm says there will be 42 million subscribers within five years of introduction.

The companies plan on beginning with aftermarket installation and later offering the technology through automakers. Delphi Automotive Systems has deals with both firms to make the satellite radio equipment, which includes a radio card and small receiver and costs about $200. The subscription fee will be about $10 per month.