OnStar Goes Standard

from the safety-first? dept

This was rumored last week when some folks “cracked” the mystery code in a new GM advertising campaign — but now it’s official: GM is going to make OnStar a standard feature in all vehicles to emphasize how safe their vehicles are. This is amusing in a few ways. First, GM used to have the reputation of being anything but safe. However, more interesting is the fact that OnStar was considered a failure during its first go around — mainly because GM didn’t focus on the safety aspects at all. Instead, they focused on the entertainment and information aspects. It was only once they focused on the safety side of things that people started to buy it. Of course, the more cynical out there may simply note that in offering OnStar “standard,” all they need to do is raise their prices by the cost of OnStar and they’ve now forced everyone to buy this option. Either way, it is fairly common for once “luxury” features to trickle down into all cars eventually — so this is just another one. Besides, even if OnStar is available, that’s no guarantee that carbuyers will pay for the service. The article notes that 60% of car owners who have OnStar do pay for it after the complementary first year, but that number is likely to go down as many of these non-luxury buyers aren’t willing to spend the extra cash. Still, by giving away the technology free, GM has a better chance of building an ongoing service revenue relationship with customers. The other big question, though, is how will OnStar work with mobile technologies? Folks in the wireless industry are trying to put telematics technology directly in the phone, rather than the dashboard. If they’re smart, GM and OnStar will be open enough to integrate with mobile phones to make the service even more valuable, rather than just closing it off to try to “protect” their existing business.

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