One of the differences between Sirius Satellite Radio [SIRI] and its rival XM Satellite Radio [XMSR] was that Sirius has been lagging in getting solid deals to have its receivers offered as factory installed options in automobiles.

However, Sirius has taken the steps to rectify that market differentiator last week with its announcement that Ford Motor Co. [F] will begin offering Sirius receivers as a factory installed option this summer.

The companies together announced that Ford is targeting up to 21 vehicle lines to have the factory-installed option for Sirius receivers, and are estimating that Ford will generate up to one million Sirius subscribers throughout the 2006 and 2007 model year periods. Ford will start offering the factory-installed option in 2006 with the Ford F-150, Ford Explorer, Lincoln Mark LT and Mercury Mountaineer models.

The companies said that with each vehicle sold with the factory-installed receiver, consumers will get a six month or longer subscription. The companies did not announce specifics with regard to the pricing of the factory-installed option.

Positive Reaction From Wall St.

Sean Butson, financial analyst with Legg Mason, said in a Jan 4 research report that the announcement was “clearly good news for Sirius.” He noted that the initial four vehicle lines chosen to lead this wave of factory-installed options accounted for more than 25 percent of Ford’s November 2004 year-to-date vehicle sales.

“We think the one million subscribers that is targeted in the press release clearly demonstrates the strong commitment by Ford to Sirius,” Robert Peck, financial analyst with Bear Stearns said in a Jan. 4 research report. “This should alleviate any concern that Sirius’ relationship with Ford wasn’t a firm one.”

Peck added that the relationship between Ford and Sirius “will emulate the current relationship between XM and General Motors [GM].” Peck noted that GM is targeting 1.1 million installed cars in the 2005 model year for XM. “The clear takeaway to us is that it appears all of the auto manufacturers are embracing the future of satellite radio with their respective partners.”

(Robert Peck, Bear Stearns, 212/272-6665; Sean Butson, Legg Mason, 410/454-5917)