|(Reuters)KVH to unveil satellite TV for cars; stock surges|
Monday January 6, 6:30 pm ET
MIDDLETOWN, R.I., Jan 6 (Reuters) - Satellite communications company KVH Industries Inc. (NasdaqNM:KVHI - News) hopes to put an end to back-seat bickering among grumpy siblings during long family car trips.
The Middletown, Rhode Island-based company will introduce a satellite TV antenna that transmits movies, sports and news programming to sport utility vehicles (SUV), minivans, and luxury automobiles equipped with backseat entertainment systems.
Shares of KVH soared 24 percent on the news it will expand its technology to automobiles, in addition to the boats, recreational vehicles and buses it already serves. Shares of KVH jumped $2.14 to close at $11.24 on Nasdaq.
Drivers throughout the continental United States can get more than 300 channels of DirecTV satellite TV movies, news, sports and live broadcast entertainment, as well as 50 channels of commercial-free radio. In the future, the antenna system will provide high-speed Internet access. DirecTV is a unit of Hughes Electronics Corp. (NYSE:GMH - News)
KVH's system will be marketed to current DirecTV subscribers, and sold through consumer electronics retailers. The antenna system will cost roughly $2,000 to $2,500, and the satellite programming will be less than $10 a month.
The satellite broadcasting service will compete against existing backseat entertainment devices, such as DVD or video players. But KVH Chief Executive Martin Kits Van Heyningen contended that live programming will be enough of a draw to entice consumers to ditch their pre-recorded videos.
"On the audio side, our research has shown that people who have CD players in the car still listen to the radio 70 percent of the time," said Kits van Heyningen, who expects to see similiar patterns for visual content.
"Live programming has an incredible draw. People get tired watching the same videos over and over again. With this, they can drive to a sports event and watch the pre-game show on the way, or drive to work and listen to CNN," he said.
A report from J.D. Powers and Associates said every 2002-model SUV and mini-van offered backseat entertainment systems as options. About 96 percent of Nissan Quests, 31 percent of Ford Expeditions and 30 percent of Ford Windstars shipped with the video systems, according to J.D. Power and Associates.
KVH's 4-1/2-inch high TracVision in-motion satellite TV system, which uses phased array antenna technology, will be introduced on Jan. 9 at the Consumer Electronics Show in Las Vegas. The company will launch the product this quarter, and begin commercial delivery in the second quarter.
The company said it was still in talks with DirecTV to finalize a revenue-sharing agreement. It declined to provide a forecast for how many antenna units it planned to sell this year.