You guys who are so stuck on the notion that the iPod is "an MP3 player" so why would we want to do XYZ (like playing satellite radio) on it make me laugh.
It's a MUSIC player at the very least, and a MEDIA player (see: iPod photo), and a storage device, and a way to carry contacts, calendar, etc.
I can't imagine too many reasons to upgrade my iPod from what I currently have. My current player is larger than my entire music collection by a factor of 4. And even if I filled it, so what? Would it really make sense to buy a newer one for an incremental increase in storage? Or a minor change to the ui? When it's working just fine? Come on guys.
HOWEVER, add Sirius - or even good ole AM/FM - and keep the form factor the same and make it easy to use (no problemo for Steve's boys)...THEN you'll have something. Not only a whole new *real* reason to upgrade but recurring revenue as well. Even if you didn't spend a dime at the iTunes store Apple would get a cut of the monthly fee paid for the satellite service.
If this was anything other than an engineering issue (which I'm fairly certain it was) i.e. tough to fit everything into the form factor that we all love, I'd be shocked.
When the satellite receiver can be shrunk down to a single IC the size of a dime and satellite antenna's can be embedded in ear pods, THEN we'll see this happen.
And btw satellite radio won't fail. The stocks may be insanely overvalued from any rational investment criteria point of view (which they are) but one has nothing to do with the other. You who discount it have not tried it. Here's why radio (in any form) matters: new music.
TM