DETROIT – OnStar,’ telematics division in the coming months arguably will take its best shot at growing its business beyond its staple suite of safety and security services by becoming a vehicle platform for wireless connectivity.
The goal, says newly appointed OnStar chief and wireless-industry veteran Mary Chan, is to throw today’s vehicle a lifeline by connecting it with the myriad mobile information and entertainment feeds now available.
“If you look at the global connected consumer, it’s not just about the safety and security service anymore.,” Chan tells WardsAuto in her first meeting with journalists here , where she also announces plans for OnStar to make its next global expansion in Mexico with the ’14 model year.
“It’s about infotainment and enabling end-to-end solutions across the OnStar service platform,” says Chan, who took over the lead at OnStar May 1 from Linda Marshall, who left GM in February.
The auto maker in recent years has been looking for ways to unlock all the potential OnStar offers.
The telematics service already leads the industry in the safety-and-security space, offering peace-of-mind items such as crash notification to emergency personnel and a monthly vehicle diagnostics service for a fee, boasting installation on 6 million vehicles in the U.S., Canada and China.
The company recently launched OnStar FMV, or For My Vehicle. The mirror-mounted system is available through big-box retailers, allowing owners of non-GM vehicles access to some of its services. OnStar also helps GM build better cars, using the wireless technology to gain real-time information about a vehicle during the development process.
But OnStar remains a tough sell to many consumers who question the value of a service that only is necessary in the relatively rare event of an emergency.
In recent years, GM has added items such as the monthly diagnostic reports, which provide car owners with a complete vehicle checkup. Drivers also can load navigation information from their home computer or via the OnStar button while on the highway.
Additionally, OnStar provides a link between the vehicle and the car buyer’s smartphone, allowing him keep track of such things as the state-of-charge on the Chevrolet Volt extended-range electric vehicle or unlock the doors of his Cadillac CTS.
OnStar’s retention rate, or the number of GM new-vehicle owners who choose to keep the service after its 3-month free trial, typically runs 60%-70%, depending on the brand and model.
But GM believes it finally has cracked the riddle of how to leverage OnStar’s full potential by using it as a platform to bring Wi-Fi into the vehicle.
That sort of connectivity opens up a litany of other possibilities, such as syncing passengers’ mobile devices for access to their preferred smartphone applications and cloud computing, where wireless information from multiple sources can be brought into the vehicle.
Other uses include location-based services for features such as real-time traffic updates and the ability for GM to service the vehicle’s software without the owner having to visit a dealer.
“There are multiple business models,” says Chan. But in the end, “people are always looking for their Wi-Fi hotspot. They don’t want to lose it. They want to stay connected.”
While all auto makers want to make their vehicles rolling hotspots, so far it has been reserved for luxury buyers with pockets deep enough to pay for the technology.
Audi, for example, announced at the Consumer Electronics Show in Las Vegas earlier this year plans to connect its cars, most of which already feature Wi-Fi service, with an advanced infotainment architecture for mobile computing.
The challenge has been making the infotainment features consumers enjoy on their smartphones safe for use in a vehicle. Mercedes-Benz tweaks some popular smartphone apps for use in its vehicles and plans to develop apps in-house for future products.
However, that means the user experience may not be exactly the same as with the smartphone. There also is the issue of cost for auto makers that have to source hardware and software from outside vendors to gain connectivity.
That’s where GM has an advantage with OnStar, Chan says.
“Others turn to solution providers to bring pieces of it to them and bolt it on,” she says of Wi-Fi connectivity. “So I think we have a great opportunity to leverage the OnStar platform and the knowledge of its people, who actually understand the customers and the quality of the service they expect.”
The auto industry has entered into an “innovation cycle,” where it can deliver to consumers an ownership experience like never before, she adds. “There is a lot of intelligence in a vehicle today; it just exists on an island. It’s exciting to have the opportunity to integrate it with the wireless infrastructure.”
Chan joins OnStar from Dell, where she served as general manager of Enterprise Mobility Solutions and Services since 2009. Similar to her role at OnStar, she was tasked by the computer maker with connecting hardware with the wireless world.
Prior to Dell, Chan led the wireless businesses of Alcatel-Lucent and Lucent Technologies and AT&T.
She is the fourth executive to lead OnStar in as many years. However, Chan also fills a newly created position as GM’s vice president-global connected consumer, with responsibility for a recently formed global infotainment business unit, as well as OnStar’s global business operations. She reports directly to GM Vice Chairman Steve Girsky.
Terry Inch, a decade-long veteran of OnStar, now runs the unit’s day-to-day business as vice president-sales, marketing and new business development.. He reports to Chan.
OnStar’s expansion into Mexico comes a little more than two years after it took its first leap outside the U.S. and Canada to China, where it boasts more than 400,000 subscribers.
Chan says GM plans to roll out OnStar into other global markets soon, but declines to name specific countries.