XM Satellite Positioned Better Than Sirius For 2006 07.01.05, 9:12 AM ET Forbes Banc of America Securities said a satellite radio hardware pricing war could intensify in the third quarter. Banc of America said channel checks indicate that XM Satellite Radio Holdings (nasdaq: XMSR - news - people ) could start selling the Roady2 in retail for $49.99 with no rebate, beginning over the next month. For XM, the research firm sees a neutral outlook. "Entering into 2005, we expected XM to use its cost advantage to be more aggressive on product pricing," Banc of America said. But the firm sees pressure on either cost or average revenue per user on Sirius Satellite Radio (nasdaq: SIRI - news - people ), and the XM promotion is a "negative." The firm said, "We are unsure as to what Sirius' reaction will be, but we are certain they will offer a competitive response." The XM promotion probably indicates that Sirius has gained retail share in the second quarter, but that doesn't mean that XM had a week quarter, Banc of America said. Although both satellite radio companies should show strong subscriber growth in the second half of 2005, the firm said XM is better positioned for 2006. In fact, Banc of America ranks Sirius in its two least favorites in radio and TV broadcasting, along with Citadel Broadcasting (nyse: CDL - news - people ); both are rated at "neutral" with respective price targets of $5.50 and $14. The firm's two top picks are Univision Communications (nyse: UVN - news - people ) and Radio One (nasdaq: ROIA - news - people ), both rated at "buy" with respective target prices of $33 and $17.