Speculation about a possible pair up began when Sirius Satellite Radio CEO Mel Karmazin told a group of investors that "we'd love to buy" XM. That's a pretty bold statement considering XM has 7 million subscribers to Sirius's 4.7 million. As we reported, Sirius is closing the gap thanks to its acquisition of Howard Stern in January, but is still a ways off from surpassing XM's subscriber base.
A Sirius/XM two-headed monster would serve to protect both companies against the onslaught of new technology that threatens each. iPods, cell phones, and various digital music devices are all competing for similar consumers. Both satellite radio companies have new-vehicle buyers to thank for the bulk of their subscribers, so if Apple wanted to deal a crushing blow it'd start giving away Nanos with new car purchases. Somehow we doubt that's ever going to happen.