XM was a great idea when it first came out; take the cable TV model and apply it to radio. It was great - the content was fantastic, the selection was much better than anything on FM, and the quality was first-rate. To me, audio quality is very important, and I enjoyed listening to CD-quality tracks on XM much more than even the strongest FM signal. I loved it while I had it, but hated paying 12 bucks a month for the service.

About a year ago, I canceled my service with XM because I found other ways of getting the music I wanted and the quality I desired. I had been using Pandora for years, but not until the Pandora App arrived on the iPhone did I consider dropping XM entirely.

With AT&T's 3G coverage constantly increasing, the need for a satellite connection has become obsolete. One of the main features of XM and Sirius is the fact that you can receive a strong signal basically anywhere in the country. On my daily commute to work outside of Chicago, I get plenty of bars to get consistent playback on Pandora. Another feature that XM and Sirius claimed to have was the lack of commercials (I found this was not true, they just had fewer commercials). Pandora, on the other hand, only has a small banner ad at the bottom of the screen, and NO commercials in between tracks. Sure, XM and Sirius have hundreds of channels, but with Pandora, I can create and manage several of my own customizable stations. All of these reasons make Pandora a better option, audio-wise, but when you throw "its free" into the mix, its a no-brainer.

More and more internet radio stations are showing up in the iPhone app store and on other platforms (Android, BlackBerry, Windows Mobile, etc), and they're all free. XM even has its own app on the iPhone, but why would you pay for the XM service when you can get a better app with free service? As Pandora, Slacker, NPR, Y! Music, AOL Radio, and more, become more and more popular, the need for a service like XM and Sirius will diminish.

There are plenty of arguments against the death of XM and Sirius. The company's stock has been going gangbusters in the market - up 40% in the last week (See Tech Trader Daily report here). The main reason for this is a product called SkyDock. Basically, this accessory plugs into your iPhone or iPod Touch and acts as a satellite receiver for XM and Sirius. Currently, the XM and Sirius apps use 3G for connectivity, and the audio isn't as clear as satellite. SkyDock will undoubtedly be sold separately and definitely wont come complimentary with XM or Sirius service. So, to put this in basic terms, I have two options:

1. I can buy SkyDock for $30 or $50 and attach it to my iPhone (which is a pain because now I have to carry this thing around). On top of the SkyDock expense, I also have to continue paying XM or Sirius for their service. At $12 a month, I would be paying close to $200 for the year.
2. I could settle for a hit in audio quality and use one of the many free internet radio apps. I don't have to listen to any long commercials and I don't have to pay for the service. I can customize my own stations and rate the songs I want to hear and the songs I don't ever want to hear. Aside from paying my standard AT&T service bill, this option is $0 for the year.
I'm sure there are plenty of people out there that love satellite radio and don't mind paying under $20 a month for the service. For the Howard Stern listeners out there, Sirius is really the only way of hearing the show, so you don't have much choice there. I have used and loved satellite radio before, but now that I've switched to internet radio, I'm never looking back.