Sirius XM Counting Down To Competition From Apple CarPlay And The Android Auto System

Sirius XM Holdings Inc. (NASDAQ: SIRI)'s satellite radio is found in 75 percent of all new cars sold today. According to Amy Yong of Macquarie Capital, Sirius' dominance in the car will continue until at least 2020, given its "unique commercial free bundle" that's hard to replicate.

In a report on Thursday, Yong reiterated an Outperform rating on Sirius' stock with a $4.85 price target. The analyst pointed out that while new streaming services from Pandora Media Inc (NYSE: P) and iHeartRadio appear to be pop up every day, these are mostly mobile services and aren't included any of the interconnected car systems, such as Apple Inc. (NASDAQ: AAPL)'s Car Play.

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Even if streaming music services where to be included in Apple CarPlay, the service would reach just 24 car makes and 114 different models while Android Auto is only available in 23 makes with just 28 more coming soon. These figures "still pale in comparison" to Sirius, which boasts "one of the most effective CRM systems among consumer companies."

Meanwhile, Sirius's next generation service called "360L" will be available in late 2017 and early 2018 and offer customers a full two-way connectivity experience with an interactive search/discovery functionality, on-demand options and voice control.

Finally, a Howard Stern video offering could be launched in early 2017 which enhances the service's value proposition and encourage subscribers to sign up for the app for an incremental $4 a month.