Telematics Creeping Out Of The Dashboard
By Mike Masnick, Wed Jun 16 23:15:00 GMT 2004

Just as telematics systems like OnStar are finally catching on in cars, they face a new challenge from mobile phones. Can telematics vendors embrace the mobile revolution?

GM's OnStar service has been around for a while, though it struggled for many years. People would accept the free trial service, but OnStar couldn't convince many customers it was worth paying for regular service. That changed, however, in the past year, as OnStar suddenly switched from promoting the fun, playful aspects of OnStar (getting the news, finding a restaurant, checking your email) to the save your hide aspects of OnStar (immediately calling you when your airbag goes off, remote unlock of doors and, according to their commercials, helping you get out of snake infested areas).

That shift in strategy from fun to "freaking people out" has worked wonders for the company. New users are signing up, and even users who had previously ditched the service are coming back at the rate of 3,000 returning customers every month. Other telematics providers have noticed and have mostly copied OnStar's marketing strategy -- helping the overall industry boom.

However, the rise of smartphones with included GPS and location-based services can be seen as a threat to in-vehicle telematics systems. They can offer similar functionality at a fraction of the price, and in a mobile format. Already, for example, Avis offers renters a mobile phone with a navigation system rather than a complete in-dash telematics offering. The telematics systems are still more powerful, but there are plenty of stories about existing technologies being eaten away from below by "good enough" replacement solutions that are much cheaper.

This time, though, the telematics providers may not get taken by surprise. OnStar appears to realize the main challenge they're facing and are taking a few proactive steps towards meeting the mobile phone challenge halfway -- which could lead to a solution that's better for everyone. Today, they announced plans to let Verizon Wireless subscribers use their minutes via OnStar for an extra $10/month. Subscribers will also be able to transfer calls from one system to another, so they can easily shift a phone call to their OnStar handsfree system while driving. This is just a first step towards more complete phone-to-dash integration, however. Since the in-dash systems can be much more powerful, and can make use of a large display screen, it's likely that systems will gravitate towards a hybrid solution.

The mobile phone can include much of the "smarts" of a telematics system, but when in a vehicle, it can use a wireless connection (Bluetooth, for now) to let it display information on the in-dash display. The vehicle can then tie in various in-car sensors to the phone to better handle specific situations. For example, if the airbag is set off, the in-dash telematics system can immediately communicate with the phone to dial for help, rather than relying on the in-vehicle calling system. By keeping most of the smarts within the phone, users also can make their telematics system mobile. It lets them keep their own settings and use them in multiple cars. In this way, the vehicle and the phone each specialize in what they do best, and create a more powerful combined solution. If the telematics vendors do continue down this path, they will have embraced a potential threat, expanded it, and created something much more useful in the end.