UPDATE 1-Sirius XM slated to launch iPhone app on June 18

* Sirius XM iPhone app free to online subscribers

* Shares up 8 pct

NEW YORK, June 17 (Reuters) - Sirius XM Radio (SIRI.O: Quote, Profile, Research) subscribers will be able to download software on June 18 that lets the satellite radio service's programming play on Apple Inc's (AAPL.O: Quote, Profile, Research) iPhone.

"Beginning tomorrow, the (iPhone) App will be available," a customer service representative for the New York-based company said on Wednesday.

The iPhone service, which can also be used by iPod Touch Wi-Fi users, will be free for Sirius customers who subscribe to its Internet option. Others will have to pay about $3 month, the representative said.

The move is seen an important way for Sirius to gain and retain subscribers, by providing easier access to its news, talk, music and sports programming through means other than its traditional satellite-based platform.

Sirius already has about 19 million subscribers to its pay radio system, but its biggest source of new user is the when consumers buy cars with satellite radios built-in.

But last month, Sirius attributed a quarterly decline in customers to poor automotive sales, and predicted a "noticeable hit" to its subscribers in the current quarter for the same reason.

Sirius faces both big opportunity and tough competition in Apple's App store. Apple has sold more than 40 million of its iPhones and music-playing iPod Touches to date, with a substantial portion in U.S. where Sirius's nationwide broadcasts are concentrated.