Sirius Satellite Radio Inc. on Wednesday got a contract to provide commercial free radio services for many of Chrysler's 2003 cars.
Sirius and its rival XM Satellite Radio Holdings Inc. are locked in a fierce competition for subscribers in a still nascent industry. Agreements with automakers are considered to be one of the best opportunities for Sirius and XM to grow their businesses.
Chrysler, a unit of DaimlerChrysler AG, said on Wednesday it will offer the Sirius service on more than a dozen models, ranging from its subcompact Dodge Neon to the Jeep Liberty sport utility vehicle and the popular PT Cruiser.
Chrysler said the service will be plugged into cars as a dealer-installed option for $299, plus the cost of labor. Drivers also will pay a monthly subscription fee of $12.95 for the service, which broadcasts 60 commercial-free music channels and 40 news and entertainment channels via three satellites orbiting directly over the United States.
Several automakers already have announced that they will offer one or both services.
Nissan Motor Co. Ltd. has said it would make available both Sirius and XM Satellite radios on select 2003 model Nissan and Infiniti vehicles, and Volkswagen has said the same of its Volkswagen and Audi models. XM in April said it expects a deal with General Motors to put 300,000 to 400,000 XM-ready cars on the road by fall 2003.
Wall Street analysts have voiced concern about Sirius's growth potential. On May 31, Bear Stearns trimmed its 2003 and 2004 new subscriber estimates for Sirius, saying it had concerns about the expiration of exclusivity clauses in Sirius' deals with Ford Motor Co. and BMW, under which the car makers will install Sirius radios in their cars as a factory option.
Sirius has said it is in negotiations with Ford on its contract but did not provide details.