OnStar To Enter Retail Aftermarket with a Mirror-Mounted Device: Analyst

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Soon retailers will be able to sell OnStar. General Motors will make OnStar available to consumer electronics retailers in 2011 in the form of a mirror-mounted telematics device, says analyst Roger Lanctot of Strategy Analytics.
“For at least the past two months, GM has been building a team intended to bring an aftermarket OnStar product to the world of ‘big box’ retail epitomized by Best Buy and others in the U.S.,” said a Strategy Analytics blog. One reason for the retail entry is simply that car sales are down—21 percent in 2008, 32 percent in 2009 and flat in 2010 as per JD Power estimates. So OnStar is having trouble maintaining its 5.5 million subscriber base. Another reason is that GM needs to compete with Ford and other car makers that are pushing smartphone connectivity, which offers some of the star features of OnStar, says Lanctot.
But OnStar may also offer more than one retail solution: possibly a smartphone app with roadside assistance, concierge services and location awareness features, he said.
A spokeswoman for OnStar said, “We do plan to make a series of technology announcements through the summer that will further solidify our position as the world’s number one in-vehicle communication service, but specifics of those announcements have not been made public yet.”
Lanctot’s report follows an interview with OnStar president Chris Preuss in CNNMoney on Friday which said OnStar should announce an update or relaunch of its service this summer. Also, the OnStar exec said the company may expand beyond GM and “beyond automotive.”
He also said the OnStar relaunch could include features from the Chevy Volt due late this year which will offer smartphone remote control over features such as remote start remote start, door unlock, and battery readings.
This new version of OnStar is being developed along with a partner, as yet unannounced, said Preuss, noting that GM is currently hiring about 30 new people to work on the service, although it will need more. The OnStar exec also told CNNMoney that OnStar might offer advertising to help defray costs. Currently the service costs about $20 to $30 a month after the first year of free service and more than half of consumers pay the fees after the trial year.
On the issue of expanding beyond automotive, Preuss said, “We’re aggressively working right now to see how we can extend the OnStar business even beyond automotive.” I guess we know what he meant.
For more information on the Chevy Volt OnStar app see here.

–Amy Gilroy
Source: Strategy Analytics, CNNMoney

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  1. I think GM’s playing this just right. Now that other auto makers are catching up with their own versions of onstar, they’re losing the competitive advantage it gives them with car/truck sales. This is the perfect way to expand their customer base, and retain profitability of Onstar instead of letting it slowly become part of the masses. I wonder if they’ll license other automakers to use as well….

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