Digital Car Telematics

Professor N. Venkat VenkatramanBoston University School of Management

December 2008Discussion Document

GM OnStar in 2008:Strategy for the Second Decade

Outline

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1. OnStar: the First Decade

2. Competitive Landscape [circa 2008]

3. What should OnStar do next?

Note: Some images in the presentation have associated URLs for easy navigation. Please click on them for additional information online.

What’s OnStar?

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OnStar: Background

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Founded in 1995 as a collaboration between: GM EDS Hughes Electronics

Launched at the 1996 Auto ShowInitially available on 1997 Cadillac Deville, Seville &

Eldorado modelsNow standard on all GM vehicles in USA and Canada

Scale of OnStar operations..

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Monthly average of OnStar responses through June 2007 includes:

400 stolen vehicle locations 1,000 air bag notifications 380 advanced automatic crash notifications 6,000 Good Samaritan calls 11,400 emergency calls 47,000 remote vehicle diagnostics 27,000 roadside assistance calls 50,000 remote door unlocks 353,000 routing calls 14,000,000 OnStar hands-free

calls

Source: OnStar

OnStar in 2008: Two-tier of Services

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Safe & Sound ($199/year)

Directions & Convenience ($299/year)

A Day in the Life of OnStar

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OnStar: Technology

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Partnership with Motorola

OnStar: Privacy and Trust

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Technology-enabled Services

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Does your car email you?

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OnStar-MapQuest Partnership

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April 25, 2007

Turn-by-Turn Navigation

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Hands-Free Calling (with Verizon)

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Eyes on the Road;Hands on the Wheel

OnStar Command Center

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Reflections on the First Decade

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Listen to Chet Huber’s reflections in the podcast

Outline

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1. OnStar: the First Decade

2. Competitive Landscape [circa 2008]

3. What should OnStar do next?

Competitive Landscape: [circa 2008]

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Sync: Ford-Microsoft Joint Initiative

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Sync: Integration with multiple devices

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Sync: Distinctive Features

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Sync: Accomplishments and Ambitions

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30,000 subscribers in 2007. Target of 1 million by 2009 (link).

Sync 2.0 update announced during the 2008 CES show by Bill Gates

Ford Sirius Travel Link

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“up-to-the-minute information and entertainment content through the vehicle's navigation system”

Press release

911 Assist & Vehicle Health Reports

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Peer-to-peer Sync network?

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Nokia acquires Navteq

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Nokia acquires Navteq (link)

Nokia’s rationale for the acquisition

TomTom as a competitor? Partner?

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Many other players are jockeying to play…

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ATX Technologies: Competitor or Partner?

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Outline

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1. OnStar: the First Decade

2. Competitive Landscape [circa 2008]

3. What should OnStar do next?

Looking Ahead..

According to TRG Group, ‘monitored telematics’ will be a $4+ billion market with over 40 million units in use by 2011 (link).

The same company estimates strong revenue growth for OnStar (link)

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OnStar: Looking at the Second Decade…

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OnStar has been a leader in its first decade. The next decade looks more complex and challenging. The technology landscape holds much promise but the competitive space is getting more complex with strong response from Ford (with Microsoft) and other third-party entities.

What should OnStar do to ensure that it continues to be a leader in North America? What new technology-enabled value propositions should they pursue? What alliances and partnerships may be required? What threats do they face?

What would you recommend?

So…What Next for OnStar?

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Some Useful Links

Telematics Update (link). Telematics Research Group (link). Hughes Telematics (link). ABI Research (telematics blogs). Motorola Automotive (link). Microsoft Automotive (link).Microsoft-and-Fiat (link)

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Lessons from this case

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Implications for You

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