OnStar Wars Heat Up

The year was 1996. Bulky, monochromatic computer monitors were the norm, while color displays were uncommon (and LCDs were still years away). The Palm Pilot hit the market, while Apple was being written off. Windows 95 was still available on floppy disks, long before downloading large files was even imaginable. And General Motors introduced OnStar, the world's first "telematics" system, on a trio of Cadillacs.

Telematics is automotivespeak for wireless communications and location technology, an equally apt description for today's smartphones. In other words, those aging Cadillacs were actually well ahead of their time in terms of technology. Using GPS and an embedded cellular modem to relay information about the vehicle over the airwaves, OnStar was marketed as must-have safety technology that no other car could offer.

A Better Connection to the Car
For more than a decade OnStar effectively ruled the telematics market, even initially outsourcing its services to other automakers. Despite that dominance — or maybe because of it — telematics technology remained dormant for years, with OnStar adding occasional safety features like stolen-vehicle tracking and convenience services such as navigation and hands-free calling.

But recently, telematics has undergone a renaissance of sorts, and suddenly OnStar has lots of competition. Ford, Hyundai, Lexus, Mercedes-Benz and Toyota have introduced new offerings in the past two years, while OnStar and BMW have added significant new features to their existing systems. And thanks to the popularity and capability of smartphones, the new breed of telematics systems are set to change the way people interact with their cars.

Web-enabled smartphones and their attendant apps are providing drivers with more features and a closer connection to their cars — and, for automakers, a closer connection to their customers. And it's just getting started. "The floodgates are on the verge of opening wide to enable you to do virtually anything in your car," predicts Roger Lanctot of Strategy Analytics, a market research and consulting firm.

Three Tracks for Telematics
Until now telematics has developed on two basics tracks: "embedded" and "enabled." Each has its advantages and drawbacks — which is why they are beginning to merge. Embedded, which OnStar pioneered, means that a cellular modem is contained within the car. Enabled means that a connection is established via a driver's own mobile device, and since it also uses the phone's minutes there's no additional subscription to purchase.

Ford Sync is at present the only example of an enabled system. It uses a driver's Bluetooth-connected phone for telematics functions, including automatically dialing 911 when Sync's 911 Assist feature is activated by deployment of an airbag or a car's emergency fuel shutoff. But if the phone is smashed from flying around the vehicle's interior as it rolls four times at 75 mph, nobody's getting notified of that crash.

A smartphone's Internet connection is becoming the portal for Web content into the car.

Ford, of course, stands by the reliability of Sync's 911 Assist. "We've found the phone to be very robust," says Ed Pleet, manager of product and business development for Connected Services at Ford. And as a value-added feature to the popular Sync system — sans a monthly subscription — 911 Assist is a good selling point for Ford.

Now a third track for telematics is emerging: a hybrid approach that uses an embedded modem that handles crash notification and other mission-critical functions while a smartphone connection is also available to provide Web-enabled and remote-control features. Another advantage of tethering a smartphone to a telematics system is that functions can be upgraded in tandem with the device.

"I think it has to contain both," says Erik Goldman, president of Hughes Telematics, which supplies Mercedes-Benz's mbrace system. "[Embedded] solutions are engineered to survive a crash. On the other hand, if you're only embedded and the service doesn't evolve over the 10 years or so the customer might have the car, you want to be able to leverage what can be brought into the vehicle by the consumer with a handset."

Compelling Features
Even without being connected to a smartphone, today's telematics systems offer pretty compelling features. Say you're on your way home from work and you realize it's your anniversary. Say, "Flower shops," and the in-dash display will bring up a map showing the nearest flower shops. Say, "Start routing," and an automated voice will direct you there turn-by-turn. Hyundai's Blue Link system does this.

Or you remember that it's the anniversary of your divorce. Say "Irish pubs" instead. Then say, "Call Mike," and get your best man to meet you there. With Mercedes-Benz's mbrace system, a feature called Safe Ride will even arrange a taxi if you've had one too many.

Or say you don't like your teen daughter's boyfriend. With a few touchscreen taps on your dashboard, you can put a "geofence" around his neighborhood. Now if she drives your car anywhere near the guy, you'll get a text message. That's also available from Hyundai's Blue Link and is coming to Mercedes-Benz's mbrace system — although the advantage of this may be outweighed somewhat by allowing your teenager to drive your vehicle in order for it to work.

A Portal for Web Content
Some of the latest telematics features specifically appeal to the smartphone-addicted: receiving e-mails, text messages and Facebook and Twitter feeds and having them read aloud while you're behind the wheel. While these are mostly embedded features, most telematics systems are starting to use smartphone apps to allow remote functions such as door locking/unlocking, remote start, locating a car on a map and more with a few screen or button taps.

A smartphone's Internet connection is also becoming a portal for Web content. We're already seeing automakers like BMW allowing Internet music services like Pandora and Mog to wirelessly stream music to a car's stereo through a smartphone connection. And BMW, Ford and Toyota have begun to allow access to certain smartphone apps from their telematics system.

"With smartphones and the ubiquitous nature of Internet access, the desire to have whatever I want, whenever I want it, wherever I am, is addressable," says Nick Pudar, OnStar's vice president of planning and business development. "People don't want telematics till they know what it can actually do."

But next-gen telematics won't just be about Pandora playlists and updating your Facebook status. The technology also has the potential to save car owners, carmakers and car dealers lots of time and money. Most systems are capable of connecting with a vehicle's onboard diagnostic software, which could save you a trip to the dealer to diagnose a problem.

Instead, data could be sent directly — and wirelessly — to the manufacturer. And you'd get an e-mail telling you if your transmission fluid needs topping off or if the head gasket's about to bite the dust. Hughes Telematics' Goldman estimates that OnStar already helps GM "save millions annually based on data coming out of the vehicle."

Service and parts are 50 percent of a dealer's profits," adds Lanctot. "So that embedded module is extremely important hardware for managing customer relationships."

Apps Are Where It's At
The biggest advancements in telematics ultimately could be driven by developments — and developers — outside the auto industry, again thanks to smartphones and the smart folks creating apps for them. The Apple and Android app stores have shown the almost limitless potential of apps. And things could really take off now that Ford and GM have begun to open their telematics systems to outside app developers, which will perhaps spur other automakers to relinquish their traditional death grip on the dashboard electronics.

"The sky will be the limit with telematics," forecasts Lanctot. "All you have to do is think it and it'll happen."