If you simply must have XM Satellite radio everywhere you go, the XMP3 delivers. But beware of this gadget’s limitations before you drop your hard-earned cash.

It sounds like a great idea: make a device about the size and shape of a hard-drive-based iPod which can not only receive real-time satellite radio broadcasts, but also lets you record and manage your favourite shows and tracks, while giving you virtually unlimited access to your own collection of MP3 files.

In fact, when the Pioneer Inno debuted about 3 years ago, with the feature set I just described, I thought it represented the state-of-the art in portable digital players. While some MP3 units were already offering built-in FM radios, none could match the incredible diversity of music made possible by combining ripped MP3s *and* commercial-free subscription satellite radio content. I came close to buying one on more than one occasion.

At the time, the Inno was well reviewed and generally liked by owners despite having a meagre 1GB of non-expandable memory and the inability to pause live radio broadcasts. It was also hobbled by a battery that couldn’t deliver more than 5 hours of continuous use. But it was a unique device which many had been waiting for.

3 years later, the Inno has been supplanted by the next generation of portable satellite receivers – the XMP3. Many of the criticisms aimed at the Inno have been addressed in the XMP3: the internal memory is now 2GB and can be expanded up to 10GB using external MicroSD cards. It can pause live broadcasts, and record up to 5 different channels simultaneously. The battery, while only good for about 4.5 hours of real-time satellite listening, can last for approximately 16 hours in playback mode.

The unit lets you display stock ticker or sports score information on the screen while you are receiving a broadcast, and has a handy feature which lets you know when a favourite artist or song is being played on any of the service’s 130 channels. You can schedule recordings of your favourite shows via the included XM2GO Music Manager software, which also lets you upload your personal collection of MP3s.

The build quality of the XMP3 is excellent. It feels solid in your hand and actually weighs less – a lot less – than an iPod Classic, while the screen is nearly identical at 2.5 diagonal inches. Unlike the iPod, the XMP3 has a removable and user-replaceable battery. The screen is bright and has excellent sharpness and contrast – it’s easy to read even in bright sunlight. The included ear-buds are of the in-canal variety and come with extra silicone sleeves to achieve the right fit for most people. These earphones tend to be a bit heavy on the bass side, but I found them to have a warmer sound than the ubiquitous white earbuds that come with the iPod.

The controls are immediately intuitive for anyone who has spent time with an iPod. The circular scroll wheel and enter button on the front are joined by 4 regular buttons that give you direct access to some of the more oft-used features such as Menu and Options. On the side of the player are physical controls for volume and a combined power and hold switch. The tactile feedback of the controls is excellent and while the on-screen menu system isn’t quite as refined as the iPod, you get the hang of it very quickly.

The XMP3 also come with a generous set of accessories included in the box. You get an AC charger, USB cable, docking cradle, external antenna, a stereo patch cord to connect the radio to your home system, and a well designed remote control that favours real buttons instead over the blister-bubble type found on so many credit-card sized remotes. It should be noted though, that charging the XMP3 can only be done via the AC charger and not via USB, so you may want to buy an extra one for travelling or for keeping at the office.

So with all these seemingly positive characteristics, why was my summary statement so bitter-sweet?

The problem is that for every strength this gadget possesses, there is a compromise waiting on the other side.

The XMP3 can tune in 130 channels of all-digital satellite radio programming. If you’re lucky. Toting the unit around downtown Toronto in my pocket, in the car, standing still and walking in and out of buildings proved to be an exercise in frustration. The reception kept cutting in and out, and even when it was coming in consistently, the quality of the sound was barely FM quality and certainly not anywhere close to the CD-quality I’ve come to expect from the digital satellite channels I get via Bell TV. Receiving satellite signals reliably is not easy when you’re moving about and getting in and out of line-of-site to the satellite itself. To alleviate the problems with reception associated with urban areas that have tall buildings and other obstacles, XM maintains a network of terrestrial antennas along with the orbiting satellites. The XMP3 will even show you how strong your reception is for each type of signal. Unfortunately, the terrestrial antennas just weren’t powerful enough – or the XMP3’s internal receiver not sensitive enough to keep the music flowing. Perhaps people living in less densely structured locations will have a better experience.

Hooking up the XMP3 to the docking station and external antenna back at home made a big difference. Reception improved a lot. However sound quality was still less than impressive. The best I could muster from the unit was the equivalent of decent FM stereo. CD-quality sound still eluded me. The instructions seem to suggest that you find a way to get the external antenna mounted outside your home or condo for best results, but I suspect most people won’t want to go to that trouble.

Being able to control the XMP3 from across the room via the included remote was great. At least it was until I sat down on the couch about 10 feet from my receiver. At that distance, it was barely possible to discern the artist and track names and completely impossible to read the channel name. Frustration again.

Assuming you can get a reliable signal, recording on the XMP3 is easy, with the option to record a single track or the selected channel for your choice of 1-6 hours. Strangely, while you can record up to 5 channels simultaneously on "timed" mode, choosing to record a single track means you can’t leave the station that is playing the track you’re recording in order to listen to another channel. Similarly, if you want to listen to a recorded track, you must abandon any currently recording channels or tracks.

The XM2Go software is intended to help you manage your recordings, schedule new recordings, create and manage playlists and transfer your MP3s to the device. You can easily see how much room you have in both the 2GB of on-board memory as well as in the microSD card if applicable. While your MP3s can be stored to either the internal memory or the SD card, satellite recordings can only be saved to the internal memory.

I would have expected that companion software such as XM2go – designed specifically for XM devices like the XMP3 – would let you schedule recordings in much the same way as you would on a PVR, i.e. you view an electronic program guide and click on the show or time period that you want to record. No such luck. Instead, the XM2go software requires that you view the program guide in an external browser window, then carefully make a note of which channel has the program you want, when and on what date. Once you have all this info, you must manually schedule your recording VCR-style in the XM2go interface. Given the PVR-like qualities of the XMP3 itself, scheduling recordings this way feels like an enormous oversight on the part of XM or Pioneer, or perhaps both. More frustration – big time.

After my disappointing experiences with the XMP3 as a satellite radio unit, I decided to try adding some of my favourite MP3 tracks to see how the unit fared with conventional digital media. Transferring songs was easy thanks to the XM2go’s clean interface, though if you’re expecting an iTunes level of sophistication, be warned – music management is not XM2Go’s strong suit. It lacks album art capabilities and there’s no way to edit song info within the program. On the plus side, if you’d rather stick with Windows Media Player or another program to organize your tunes, you can access the XMP3 via Windows as a removable drive – complete with drag & drop to both the internal and SD card folders.

Listening to MP3s on the XMP3 was lacklustre. This came as a surprise given Pioneer’s generally strong reputation for engineering good audio and video products. Comparing the same track on both the XMP3 and an iPod nano – using the XMP3’s earbuds on both units – the iPod’s sound reproduction was better in every way. I couldn’t find the tech specs for the XMP3’s frequency response range, but my guess is that it’s less than the iPod’s.

Speaking of iPods, this last niggle may seem irrelevant for someone looking specifically for a portable satellite radio receiver, but given the XMP3’s stellar screen and its $199 street-price, you would think that the unit might be able to handle more than just radio and MP3s. Perhaps some video? Or photos? Or maybe a game or two? No. Nadda. The only extra feature Pioneer has thrown in is the ability to play back audio books purchased from Audible.com. Don’t forget that you’ll need an XM subscription starting at $13.74/month in order to get satellite content, and no, the account can’t be shared with any other XM device you may already own.

What were acceptable limitations on the Inno, a product that launched back when photos on media players were still relatively new, are totally unacceptable on a brand-new device – one that should be able to compete with value-priced media-players like the Creative Zen Mosaic.

In summary, while the XMP3 has a lot going for it compared to its predecessor and despite its physical quality and generous accessories, its failure to deliver high-quality audio and lack of advanced media playback options makes it a hard product to recommend unless you simply must have a satellite radio with you at all times.