OnStar to test new in-vehicle services

OnStar Corp., the General Motors Corp. subsidiary that provides wireless data services for automobiles, will test new services in the coming months including one that would let customers adjust their home heating or security systems while they're on the road.

The new initiatives are part of a broader effort by OnStar, described by the company's president Monday, to expand on its traditional base of safety and security services, and to meet challenges posed by new competitors in the emerging telemetry market.

OnStar made its name offering services focused on safety and security, such as sending alerts when a driver's airbag is deployed, remotely unlocking car doors and offering driving directions. It announced this week that it expects to end the year with close to 2 million subscribers for its service, which is also licensed to other car makers including Lexus, Acura and Audi.

Customers who buy new cars get their first year of OnStar service for free. The company won't reveal how many customers renew the service after the first year, but insists that it's more than 50 percent.

In the coming months OnStar will pilot a new service that would allow customers to access a home network from their automobile, Chet Huber, OnStar's president, said in an interview. Customers with home networks that support the technology could check that their home security system is switched on, for example, or turn up the air conditioning if they're driving home on a hot day.

"We can very quickly build interaction with the home network," Huber said. He wouldn't say when OnStar aims to roll out the service, but the company will flesh out details in the first quarter of next year, a company spokesman said.

OnStar is also developing vehicle maintenance services that would allow a dealership to keep tabs remotely on the health of a new car and remind drivers when they're due in for a check up. The company expects to deploy some of those services before the end of 2002, although challenges include upgrading older computer systems at dealerships, Huber said.

OnStar is broadening its services at a time when competitors are taking aim at the market leader. In particular, some of its rivals are developing productivity applications that go beyond the safety and security services that helped OnStar make its name.

They include Wingcast LLC, a company set up by Ford Motor Co. and Qualcomm Inc., which announced a partnership with Oracle Corp. in July to develop new types of telemetry services. As part of the deal, Wingcast said it plans eventually to operate as an ASP that will let software vendors like Oracle beam sales, CRM (customer relationship management) and other applications into vehicles, with the goal of making mobile workers more productive.

Mercedes-Benz, meanwhile, is showing a futuristic Mercedes at Comdex this week fitted out with high-speed 802.11a Ethernet system developed by its parent company, DaimlerChrysler AG. And MobileAria Inc., which plays in the so-called aftermarket, is showing a system that works with a Bluetooth cell phone for creating emails and receiving Internet content using voice commands.

OnStar Corp. too is interested in the productivity side, but won't hurry to deploy applications until the technology has improved and the company has made sure there's a demand for new services, Huber said. For example, he maintained that voice recognition software, which is used in MobileAria's system, doesn't work well enough currently in a noisy moving vehicle.

"You have to really ask yourself, Can I make a business out of this, or am I just throwing in new technology because its there?" he said.

To that end, OnStar won't offer access to productivity applications like Microsoft Word or Outlook Express any time soon, he said. Aside from technology issues, the company is keen to keep the costs down of any system it develops.

That said, it is open to discussions with any software vendors who want to collaborate on telematics projects. It sees opportunities to develop systems for specific, vertical markets, and expects offer customized applications by the end of next year for large companies that operate fleets of vehicles.

For consumers, meanwhile, OnStar launched a new service this year called Personal Calling, which embeds a cellular telephone number into the OnStar system and allows drivers to dial phone numbers using voice commands. The service is included with the OnStar monthly fee, although drivers must pay separately for the cellular minutes they use. If they own a cell phone already, that means paying two phone bills each month.

To address that, OnStar hopes to offer a bundling deal early next year that will allow Verizon customers to use the same phone number for their OnStar service as for their cellular phone. (Verizon provides the network service for OnStar). Besides reducing bills to one a month, the deal should let customers forward calls from their cell phone to their hands-free OnStar service while they're driving, Huber said.

Enhancements are also planned for Virtual Advisor, another OnStar service rolled out this year which streams information such as news and stock quotes through a car audio system, along with location-based traffic reports. Using OnStar's GPS (global positioning system), the service lets drivers select a radius of, say, 10 miles in which they are notified of all traffic snarl-ups.

Next month, the company plans to enhance the service by allowing drivers to specify their route to work, and then receive traffic reports tailored to that journey, Huber said.

OnStar came to Comdex partly to network and track down IT partners who could contribute to future projects. Technology companies are keen to strike partnerships with the growing telematics industry and finding potential partners isn't hard, Huber said.

"Two years ago we had to call everyone ourselves," he said. "Now that we have millions of subscribers, they call us."

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