source MOTLEY FOOL High on the wish list of Sirius XM Radio (Nasdaq: SIRI) subscribers -- and no doubt battered shareholders -- is an iPhone app. With its fast-growing wireless subscriber base, Apple's (Nasdaq: AAPL) revolutionary smartphone is a natural platform. With shares closing at an all-time low of $0.14 last week and Sirius XM slashing subscriber targets in recent weeks, an iPhone tie-in would be just the ticket in generating buzz for Sirius XM's scarred investors as well as a great customer retention tool. I'm not building the hype to tease you. At least one company is working on an iTunes App that will let iPhone owners -- and Wi-Fi-tethered iPod touch jockeys -- stream their active satellite radio subscriptions through their portable devices. Surprisingly, that company isn't Sirius XM. Don't be a Playr hater StarPlayr is no stranger to riding Sirius XM's coattails. The company already offers a more advanced streaming alternative for PC and Mac users over the in-house Sirius XM solution. There is no firm release date for StarPlayr's iPhone application, but the developer's product list has appetizing screenshots with cool features including album artwork, song lyrics, and the monetization gems of ad serving and the ability to purchase the current track through iTunes. Why is a third party developer beating Sirius XM to the punch? It's a fair question. Maybe the radio giant doesn't want to devote too many of its resources toward developing platforms beyond its receivers. XM and Sirius have been providing Web streaming of its networks for a few years now. Access is included at no additional cost to existing subscribers, though the company also sells stand-alone streaming plans. Sirius XM has never bragged about its Web-only subscriber counts during its conference calls, so it's safe to assume that it's a limited audience. There is too much competition in cyberspace, with the pervasiveness of free Internet radio making it difficult to justify aggressively marketing a premium Web product. It's a near-sighted approach. Sirius XM should take a page out of the Netflix (Nasdaq: NFLX) playbook. Seriously. Nothing but Netflix Netflix launched a PC-based streaming service in January of 2007. It isn't a profit center. Netflix doesn't charge members for access. There is no advertising on the streams. If anything, it's actually a loss leader, since Netflix still has to foot the bandwidth tab and pay participating studios their royalties. So what's in it for Netflix? Member loyalty, as measured by the company's low churn rate, is solid. The on-demand streams at no additional cost also help Netflix stand apart from its media-serving rivals. Like Netflix, Sirius XM also leans on a Web streaming service to keep customers close and happy. However, Netflix has been raising the stakes this year by reaching out to Blu-ray player makers, set-top box manufacturers, and even Xbox 360 and TiVo (Nasdaq: TIVO) owners. Making it more convenient for subscribers to consume celluloid on their own terms is the biggest secret to Netflix's success. In short, SiriusXM should be all over this, even if StarPlayr has to do the grunt work. So much to gain and even more to lose The iPhone is huge. Market research firm Nielsen pegs the active iPhone user base at 3.6 million as of October, and growing. That may seem like a small audience for a platform like satrad with 18.9 million current subscribers, but let's dig a little deeper into the iPhone audience. Nielsen estimates that 98% of iPhone users take advantage of the smartphone's Web connectivity and that 70% consume music through their phones. Millions of influential iPhone users are streaming music on their devices. Some of the top apps include: Pandora's music discovery streams. CBS' (NYSE: CBS) Last.fm Web radio. Time Warner's (NYSE: TWX) AOL Music. Sirius XM can't afford to ignore this audience. Even with a superior product, it's hard to compete against free apps pitching free music. There is Internet buzz building over StarPlayr's iPhone client hitting Apple's store later this week. Whether or not a Thanksgiving release is accurate, Sirius XM needs to make sure that it's actively finding a way to reach this growing audience. Oh, and let it do it the right way. Sirius XM has offered streamlined programming plans through conventional handsets and even Research In Motion's (Nasdaq: RIMM) BlackBerry earlier this year. The flaw in all of these seldom-discussed deals is that wireless phone users may have no problem buying costly ringtones but music subscriptions have historically been a harder sell. Sirius XM needs to approach the iPhone as a way to retain its existing subscribers, just like Netflix with its home-theater digital delivery invasion. The market also wouldn't mind if Sirius XM was paddling new revenue streams like online advertising and digital media sales. With the stock at $0.14 a share and the company only looking to add 200,000 net new subs this quarter, it's worth a shot. What does it have to lose that it hasn't lost already?