The third and final satellite, scheduled to take off from the Baikonur Cosmodrome in Kazakhstan on Nov. 30, will enable Sirius to provide consumers with a new kind of service — up to 100 stations of CD-quality radio sound that can be heard anywhere in the continental United States.

Industry observers say that the idea holds tremendous potential in the automotive market, particularly for cross-country travelers and residents of rural areas. "It's being touted as 'cable TV for cars,'" said Paul Hansen, publisher of The Hansen Report on Automotive Electronics. "There's an awful lot of people who think this idea is going to be very big."

Indeed, automakers and vendors also are bracing for rising consumer demand for satellite services during the next five years. "We've had contact from virtually every automaker in the world," said Chris Ols, a program manager for Sirius satellite receiver development at Delphi Delco Electronics (Kokomo, Ind.). "We expect to see some penetration into specific vehicle platforms by the end of next year."

Not wanting to be left behind if satellite radio takes off, several automakers have already invested in the technology, while others are forming manufacturing partnerships with Sirius and its competitor, XM Radio (Washington, D.C.). Ford, DaimlerChrysler and BMW have all allied themselves with Sirius, while General Motors and Honda Motor Co. have forged partnerships with XM.

At the same time, several media giants have also jumped into the fray. Associated Press, Bloomberg, CNBC, BBC World Service, National Public Radio, CNN/Sports Illustrated and USA Today have all announced that they will provide news service on one or both systems. DirecTV has also announced that it will invest $50 million in XM Satellite Radio Inc.

For reasons such as those, financial analysts plan to watch carefully as Sirius, and later, XM Radio, roll out their services. "We think it's going to be one of the drivers toward the adoption of more electronic entertainment in vehicles," said Dan Garretson, senior automotive analyst at Forrester Research Inc. (Cambridge, Mass.).

Technological challenge

While broadcasters, media companies and automakers form alliances, however, much of the technical work behind the satellite has proceeded quietly. More than a dozen manufacturers, including Delphi Delco, Visteon, Alpine, Panasonic, Audiovox, Clarion, Kenwood, Fujitsu, Mitsubishi Electric and others are building receivers for use in the OEM and aftermarket. At the same time, electronic component manufacturers such as Lucent Technologies and STMicroelectronics are developing chip sets for the receivers.

Engineers say that the technical challenges behind such systems are tremendous. "There are huge risks on this," said Ols of Delphi Delco. "You've got new technology from end to end. The satellites, broadcast studios, and chip sets are all new."

Prime among the technical challenges is the development of receivers and antennae that can receive and unscramble a signal while mounted aboard a moving target. "This is not like satellite television," said Tracy Stanyer, vice president of OEM alliances at Sirius. "People trying to reach a satellite television signal are stationary. Here, you're trying to get 2.3 Gigahertz into a moving vehicle and turn it into a usable signal."

Indeed, the complexity is such that engineers said that the chip sets haven't yet been fully completed. The Sirius chip set, however, is expected to be finished soon. Visteon Corp. (Dearborn, Mich.) Co. said it expects to run a demonstration of the Sirius system at the Consumer Electronics Show in early January.

The Sirius chip set incorporates eight chips, including an RF front end, a microcontroller (probably from NEC Corp.), several "DSP-like" ASICs for demodulation and decoding of the signal, and memory. A few components, including the RF front end, are said to be finished, while most of the ASICs still exist as emulations. All of the hardware for the Sirius system is expected to be completed within weeks, however.

For the Sirius system, all receiver manufacturers will use the same basic chip set, which is designed by Lucent Technologies Microelectronics Group (Allentown, Pa.). Each will, however, use the chip set to create its own "flavor" receiver. "The receiver makers will create different protocols to interface with the audio system used by the vehicle manufacturer," said Doug Wilsterman, vice president of receiver marketing and alliances for Sirius. "They'll also vary their packaging schemes and lay out the boards differently."

XM Radio, which plans to begin broadcasting in May or June, also is working on its own chip sets. Cooperative development on the XM chip sets is an ongoing effort involving STMicroelectronics, Fraunhofer Institute, Certicom, Digital Voice Systems and Lucent.

Receiver makers are currently working with engineers from both Sirius and XM Radio. "Our goal is to supply to all the major automotive OEMs," said Mark Horvath, marketing and brand manager for Visteon telematics and multimedia. "And the automakers choose their own broadcast partners, so we have to be 'delivery agnostic.' "Ongoing effort

Engineers from various companies are also working with automakers on new antenna technology. Antenna development is key, they say, if consumers want to get "CD-quality" sound.

"In a moving vehicle, you cannot reliably aim the antenna and keep it aimed there at all times," said Ols of Delphi Delco. "So the signal has to be configured in a significantly different manner and so do the antennas."

Vendors say they expect most vehicles to employ two antennae, possibly one in the rear window glass and one whip-type unit in front of the vehicle. That way, the receiver could "choose" the strongest signal and use the other antenna signal for error correction.

Engineers said that each antenna would incorporate two key elements: one aimed at the sky and another aimed at terrestrial repeaters.

For that reason, antenna design is expected to be closely allied to the choice of service provider. The reason: Sirius satellites will be located higher in space (about 60 degrees above the horizon) and require use of fewer repeaters, while XM satellites will be located at lower elevations. XM systems are expected to use about 1,500 ground-based repeaters, about 10 times as many as Sirius.

Some receiver makers plan to build their own antennae, while others are teaming with specialty vendors called for by automakers. Visteon, for example, said it will build its antennae in house. Delphi Delco, meanwhile, is working with its own Fuba Automotive Division (Rochester Hills, Mich.) and with such vendors as Receptec (Holly, Mich.), as well as others.

Learning curve

Ultimately, vendors and automakers hope to converge on a single design for most components, including chip sets, receivers and antennae. That way, users could employ OEM-supplied satellite radios to pick up the service of their choice — either XM or Sirius. Currently, however, neither company is headed in that direction. "XM and Sirius are following different paths, so the technology is a long way from being interoperable right now," Ols said.

In the meantime, Sirius and XM plan to bring the technology to market in deliberate fashion. Sirius has announced it will begin broadcasting shortly after the beginning of the year, possibly introducing the technology using preproduction receivers at the Consumer Electronics Show. XM, meanwhile, will launch its broadcast efforts in the second quarter of 2001.

Vendor engineers say that the deliberate approach is understandable, given the amount of new technology involved. "They want to be able to prove out the system before customers begin paying to listen to music," Ols said.

Predictions for the technology's success vary. An analyst at Merrill Lynch last year forecast 1.3 million subscribers by 2001 and 5.8 million by the end of 2003. Sirius executives, however, have been hesitant to predict, saying that they don't expect big numbers for a couple of years. Vendors, meanwhile, say they are confident that luxury car makers will incorporate the technology in some vehicles during the 2002 model year.

If the systems are to be successful, however, most observers agree that they must first overcome fierce competition from a variety of other electronic avenues. "They're going to have to go head to head with OnStar, in-car MP3 players, DVD players and data services," said Garretson of Forrester Research. "There's going to be lots of competition."