A recently uncovered patent filing from XM Satellite Radio could reveal a possible direction the company is looking to go in as the satellite radio market continues to evolve.

The contents of the Dec. 30, 2004 patent filing (originally filed in April 2004) were first revealed in a Jan. 13 equity research report issued by Bear Stearns.

“While our initial hope was that this patent would potentially disclose a much coveted relationship with Apple’s iPod (it did not), we actually were inspired by the road map of feasible products that XM’s patents aim to target,” analyst Robert Peck said in the report. “While the patent application is written cryptic in certain areas, we have tried to interpret the information to the best of our ability.”

Peck continued, “As we read it, the possible future for satellite radio that the patent lays out is astounding and includes devices” that have a variety of innovative functionalities.

Some of the devices that Peck sees as possible resulting from the patent include devices that have the ability to buy and store audio, video and other digital media files. “Imagine a subscriber waiting in an airport for a delayed flight and being able to hit the “buy” button to watch an episode of ‘Friends.'” Peck also suggested that, based on his interpretation, that the tuner could double as an MP3 player with the ability to legally purchase and download music.

Other possible interpretations of the patent suggest alternate means of connecting to satellite content. “These devices could possibly receive content via the satellite signal, as well as through other means (i.e. cellphones), which, when combined with the MP3 purchase option, could eliminate a step of having to log onto a computer to buy MP3s and then download them to the device.

Peck also interpreted the data to suggest a future that includes multi-tuners that would “allow a user to listen to one station live while recording other multiple stations” and giving the user the option to listen to recorded programming at a later date, as well as DVR-type functionalities including setting up the device to record programs at certain times as well as the ability to pause, fast forward and rewind stored programming.

Peck speculated that Sirius Satellite Radio is probably nor far behind on very similar developments and added, “We think that the application paints clearly the advantage of new satellite radio devices vs. other competition and hence, we think that this is something that should benefit the entire satellite radio industry.” But Peck emphasized, “we do not think that any announcement by XM is imminent on these potential devices.”

A spokesman from XM Satellite Radio declined to comment on the patent filing and its possible future implications on XM device and application and service offerings.

(Robert Peck, Bear Stearns, 212/272-6665)