Steve McCallion taps a few keys on his laptop to open a presentation on the Sirius Stiletto, a new portable satellite radio. He calls up a page that displays photos of pocket transistor radios from the 1950s, knobby dials and all. “At the end of the day, it’s just a radio,” says McCallion, a creative director at the company that designed the Stiletto, twirling the device in his fingers.

His point is that Sirius (http://host.businessweek.com/businessweek/Corporate_Snapshot.html?Symbol=SIRI) wants its own brand of radio, transmitted via satellite, to be the way people listen to radio nowadays, in much the same way they listened to transistors half a century ago. But the company is relying on a device that has come a long way since those crackly gizmos of a bygone era. BRISK SALES.

Today, some 12 million people pay $12.95 or more a month to Sirius and its larger rival, XM (http://host.businessweek.com/businessweek/Corporate_Snapshot.html?Symbol=XMSR), to listen to satellite radio channels, most of which run no commercials. Those rising subscriber numbers are likely to grow, drawing audiences from traditional, free AM/FM radio, in part because of the proliferation of satellite radio devices for the car, the home, and for listening on the go.

From September, 2005, to this August, Sirius and XM sold more than 325,000 portable satellite radios in the U.S., an increase of 88% from the year before. The units generated $80 million in sales, an increase of 49%, according to consultancy NPD Group. That figure doesn’t include sales from big retailers like Wal-Mart (http://host.businessweek.com/businessweek/Corporate_Snapshot.html?Symbol=WMT). And chances are, sales are going to keep climbing.

/>Sirius is hoping the Stiletto will play a big part in that growth. “Stiletto can make a major contribution,” says Tom Watts, an analyst at Cowen & Co. Analysts at Standard & Poor’s, which like BusinessWeek.com is owned by The McGraw-Hill Companies, also expect brisk sales. YAHOO! CONNECTION.

What’s so special about Stiletto? Part of the reason for the excitement is that the device appears to be comparable to other consumer electronics such as cell phones and music players like Apple’s (http://host.businessweek.com/businessweek/Corporate_Snapshot.html?Symbol=AAPL) iPod and the upcoming Zune from Microsoft (http://host.businessweek.com/businessweek/Corporate_Snapshot.html?Symbol=MSFT) in appearance and features. Indeed, the new Stiletto’s interface and capabilities look eerily like those of the iPod.

Stiletto’s predecessor, the Sirius S50, was also designed by McCallion’s company, Ziba. It was released last year and features a radio-like knob to pause, rewind, or stop programs. By contrast, the Stiletto offers an iPod-like round media dial. With its polished black face, the Stiletto evokes the black iPod nano. But the new gadget also features more chrome accents and a pearlized back, giving it what McCallion calls a “gem-like quality.”

But the Stiletto has some features the iPod lacks. Unlike the S50, which could only download radio streams when docked (in effect, it was a low-capacity MP3 player), the Stiletto can catch live satellite radio feed. The Stiletto can reach Sirius’ programming via wireless fidelity, or Wi-Fi, connections. It can also download songs from Yahoo’s (http://host.businessweek.com/businessweek/Corporate_Snapshot.html?Symbol=YHOO) music service, according to documents filed with the Federal Communications Commission, into 2 GB of storage. SHADOW RADIO.

While final details of the Yahoo arrangement are being worked out, the feature is likely to let users tag songs they like on Sirius broadcasts and buy them later by connecting the device to the PC.