With the financial and advertising backing of an automotive partner, a 500,000-strong subscriber base and a measured-media budget more than five times its rival, XM appears to have the lead in the satellite radio race.
But analysts caution not to count out No. 2 Sirius.
"With its head start, you have to consider XM the leader," says Tom Watts, managing director of SG Cowen Securities Corp. in New York. But, "once Sirius gets all its pieces together, there is no reason why they shouldn't be able to get a significant portion of the market."
Washington-based XM Satellite Radio launched in 2001 and says it is on target to reach 1.2 million subscribers by year end.
Sirius, based in New York, which debuted in February 2002, failed to meet initial subscriber targets. But it now lists 68,000 with ambitions of 330,000 by 2004.
Each player is saddled with the cost of spending more than $1.5 billion to build satellite networks over the next few years, but they project to break even by early 2005.
Sirius has been in the more serious financial straits, and in March, the company began a recapitalization plan.