Fortress iTunes Part 2: Sirius on the Horizon

Our article, “The Foundations of Fortress iTunes“, covered what the entertainment industry sees as the challengers to Apple’s dominance in the digital media download market: SpiralFrog, Zune, PSP and Connect, MP3 cell phones, MySpace and MTV Urge. We forgot to include one possible candidate: Sirius. As in the satellite radio. And just like the other upstars we covered in Part 1, a Wired.com reporter speculated that Sirius is looking like an assault on Fortress iTunes, too.

Remember Sirius’ Stiletto 100 portable satellite radio and MP3 player that we featured last month? The company also announced an online subscription – “satellite-free” – service called Sirius Internet Radio (SIR). As mentioned in Part 1, iPod and iTunes were the perfect partners to capture an entire market for Apple. Yeah, well SIR isn’t iTunes. The latter is an online media store. SIR’s an internet radio service that streams CD-quality music and selected talk channels.

Enter Yahoo! Music, one of the partners of Stiletto’s manufacturer, Zing. Stiletto 100 will reportedly work in conjunction with SIR and Yahoo! Music so that listeners can choose to purchase-download the song they’re listening to. As announced by Bob Law, senior VP of Sirius, “The market for digital audio on-the-go is exploding. We are working with Zing to expand the availability of Sirius content on new platforms and bring the best in satellite radio programming to an increasingly mobile audience.”

In other words, they’re making Sirius and the Stiletto into an iTunes-iPod teamup of sorts.

And there’s more after the jump: guess where the CEO of the Stiletto’s manufacturer worked before.

Our last article, entitled “The Foundations of Fortress iTunes“, covered what the entertainment industry sees as the challengers to Apple’s dominance in the digital media download market: SpiralFrog, Zune, PSP and Connect, MP3 cell phones, MySpace and MTV Urge. We forgot to include one possible candidate: Sirius. As in the satellite radio. And just like the other upstarts we covered in Part 1, a Wired.com reporter speculated that Sirius is looking like an assault on Fortress iTunes, too.

Remember Sirius’ Stiletto 100 portable satellite radio and MP3 player that we featured last month? The company also announced an online subscription – “satellite-free” – service called Sirius Internet Radio (SIR). As mentioned in Part 1, iPod and iTunes were the perfect partners to capture an entire market for Apple. Yeah, well SIR isn’t iTunes. The latter is an online media store. SIR’s an internet radio service that streams CD-quality music and selected talk channels.

Enter Yahoo! Music, one of the partners of Stiletto’s manufacturer, Zing. Stiletto 100 will reportedly work in conjunction with SIR and Yahoo! Music so that listeners can choose to purchase-download the song they’re listening to. As announced by Bob Law, senior VP of Sirius, “The market for digital audio on-the-go is exploding. We are working with Zing to expand the availability of Sirius content on new platforms and bring the best in satellite radio programming to an increasingly mobile audience.”

In other words, they’re making Sirius and the Stiletto into an iTunes-iPod team-up of sorts.

The Wired reporter had even more intriguing tidbits on Zing, Stiletto’s manufacturer. Apparently, its CEO, Tim Bucher, used to work for both Apple and Microsoft (the latter when the Seattle firm acquired WebTV, which Bucher helped found). While he was with Gates’ firm, he was part of the Xbox team that will later develop Zune. (Of course Bucher wasn’t part of the team by then).

In the short time he was in Cupertino, Bucher oversaw development of the Mini and – you guessed it – the core tech behind the iPod. But this would be the curveball: Bucher was fired in late 2004. He would then sue Apple for wrongful termination. And an insider source told the Wired reporter that Bucher and Jobs still don’t exchange Christmas cards every December.

What’s our take on this? The Wired reporter titled his piece “Finally, a Sirius iPod Threat.” We’re still sitting on the fence on this one. To repeat ourselves, Sirius is a subscription radio service, even off the Internet; iTunes an online store. They obviously have different pricing schemes. And the $349 price tag on the Stiletto will definitely generate second thoughts, even if you get a portable satellite radio and Bluetooth and Wi-Fi connectivity at the price. Nanos come for much lower.

But we can agree with the reporter on a couple of key points. Stiletto does feature more than the iPod as far as wireless audio is concerned – satellite, Wi-Fi, and Bluetooth. And if Apple concentrates on video delivery and Sirius maintains its niche specialty, satellite radio, then Sirius just might have a good thing coming for them. There’s Sirius’ other partnership with Smart to consider: the download-to-cellphone MP3 service. And the reporter’s right in saying that Sirius is cashing in on internet distribution. At the least, it’s another contender for the digital media throne that Apple’s sitting on.

And a little competition doesn’t hurt anyone one bit. Except, maybe, for Apple’s long-run market lead.