Audiovox Deal A Crucial Step for Sirius XM

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A new distribution deal for Sirius XM announced during the holidays may be an important break for the satellite radio company and its aftermarket efforts.

Just before the New Year, Audiovox said it reached an agreement in principle with Sirius XM to become the main supplier of satellite radio products to the North American aftermarket, providing product to major U.S. retailers. The deal is subject to completion of a final distribution agreement, under which Audiovox will provide warehousing, distribution, logistics and related services for Sirius XM.

Audiovox struck a similar deal with XM in 2005, prior to the Sirius and XM merger.

The Audiovox deal is crucial for Sirius XM, given that Directed Electronics announced in November that it would cease acting as a Sirius distributor as of Jan. 31. Directed cited lagging retail sales for satellite radio for its decision.

And Audiovox is clearly excited about the satellite radio prospects.

"Despite the current economic climate, satellite radio is still growing and we believe it will continue to be a prominent form of consumer entertainment. With this agreement, we expect our satellite radio sales to more than double next year with limited exposure," said Patrick Lavelle, president and CEO of Audiovox.