CES XM Satellite has claimed a pair of firsts over rival Sirius Radio with the release of two new devices that can tune in satellite radio and play MP3s and the announcement that it has topped six-million subscribers.

XM unveiled the new devices from partners Samsung and Pioneer at the Consumer Electronics Show (CES) here in Lost Wages. Both products pull down all the satellite radio content while also playing MP3s or WMA (Windows Media Audio) files. The obvious idea behind such a combination is to give customers the best of both worlds and allow them to buy a single portable music player.

"This is a major milestone for both satellite radio and MP3, and it promises to fundamentally change the way people enjoy their music," said XM’s CEO, Hugh Panero.

Of course, the devices will not work with Apple’s DRM-laced iTunes songs, meaning XM is excluded from the largest chunk of the legal online music customer base. To help make up for this loss, XM has partnered with music rental service provider Napster. Customers can bookmark songs they hear on the satellite radio, plug their device into a PC and then purchase the tunes from a shared XM and Napster portal. Then, however, you’re just getting more DRM-laced music.

If you want to check out the new products, you’ll be looking for the Samsung Helix XM2g0 and Pioneer Inno XM2go satellite radios. Both devices will cost close to $400.

XM officially ended 2005 with 5.9million customers, but that figure does not include those who purchased the XM service over the holidays and failed to activate their service by 31 December. With such customers, XM claims more than six-million users. The company expects to exit 2006 with nine-million subscribers.

Meanwhile, rival Sirius announced that it closed 2005 with 3.3-million subscribers – a 190 per cent year-over-year gain. It hopes to end 2006 with six-million subscribers. The company made a huge gamble by handing Howard Stern a five-year $500m contract to help woo customers. Stern goes live later this month.

XM and Sirius have a duopoly over the US satellite radio market and together expect to have 15-million subscribers by year end. The services offer commercial-free radio in exchange for a monthly-fee. ®