As Hurricane Irene was making landfall in North Carolina, my son was preparing to leave our Northern Virginia home to drive back to Richmond, Va., where he is attending college It suddenly occurred to me that despite the 24/7 television coverage and Internet resources, I couldn’t give him any good advice as to whether it was a good idea from a weather or a traffic perspective to set out on such a journey with the storm closing in.

My son didn’t miss a beat.  He got on the Google Website and checked Google’s traffic data, showing me that the traffic flow was “green” all the way to Richmond.  All I could think was: Another opportunity for OnStar to stand out has come and gone.  Why is this?

In his book – “Detour: My Unexpected, Amazing, Life Changing Journey with OnStar” – former and original OnStar president Chet Huber talks about the service’s reaction during Katrina.  While Huber pats the organization on the back for enabling customers with expired OnStar subscriptions to freely access the service to better locate emergency services, evacuation routes and shelter, he also proudly touts the fact that OnStar did not take advantage of the crisis.

OnStar made no press statements or press releases during Katrina to let the country know that it had added to its existing subscribers’ personal minutes accounts and had also turned the service on for expired customers during the crisis.  In Huber’s words: “Again, our sense was that bad things like hurricanes shouldn’t necessarily equal more sales for us.” 

These are noble intentions, but OnStar seriously missed the boat during Katrina and is missing it again with Irene.  It may seem crass to treat a hurricane as a marketing opportunity, but it is foolish to miss the opportunity to save lives and aid emergency responders.

For 15 years OnStar has been silent during major crises.  Where Google has aided emergency responders in Haiti and during the Fukushima nuclear crisis in Japan, OnStar has yet to feature prominently in any U.S. crisis, in spite of the fact that the service connects 5.5M users in the U.S. to emergency contact centers.

But it’s not just the emergency call center access that is at issue, OnStar has the ability to provide information to public authorities and the press regarding the flow of traffic on evacuation routes and the volume and nature of calls it is receiving from the entire affected area.  OnStar representatives could provide a public face for the emergency response community, taking some of the pressure off of public officials, while providing valuable insight regarding real-time events during a crisis like Irene.

During Katrina OnStar did not simply decline to publicize its helping hand.  The company actually refused to announce its activities.  Writes Huber:

“I actually received a phone call from the attorney general of one of the affected states while (Katrina) was going on.  He’d read an article about an OnStar subscriber who got help because our system was able to connect during the storm… he wanted us to issue a press release to make a big deal out of (our downloading free minutes).  I think he wanted a few public examples of that kind of behavior in order to stimulate more of it from other companies.

“I apologized and told him that we weren’t going to put out a press release because we didn’t want to look like a company that was doing these things just to get attention. He said that if we wouldn’t do it, we needed to get him the facts because he was going to issue his own press release to draw attention to us and a couple of other companies he thought would be examples of the right kind of behaviors.”

In the end, the question was moot.  Huber never finds out whether any press release was issued.  Many crises have come and gone since without so much as a peep from OnStar.

The disinterest in publicity seems disingenuous to me given the active social networking efforts of both GM and OnStar.  OnStar has not been shy about promoting its For My Vehicle aftermarket mirror.  Why should it be shy when there is a legitimate opportunity to help both customers and non-customer?

This is an easy situation to fix.  OnStar executives need to recognize the resource that the system represents and share it.  The industry and the country needs OnStar, and hurricane reaction assistance is only the beginning. 

Some of the best research on safety systems and driver distraction has actually been done by OnStar executives using the boatloads of data produced over the years by this unique connected system.  Important decisions regarding back-up camera mandates, vehicle connectivity and crash avoidance technologies and distracted driving laws all represent opportunities for OnStar to influence strategic thinking and policy as the industry leader.

One of the best studies – “Real-World Personal Conversations Using a Hands-Free Embedded Wireless Device While Driving: Effect on Airbag-Deployment Crash Rates” – was co-authored by my Strategy Analytics colleague, Chris Schreiner, during his time at OnStar.  The study shows fewer accidents occurring while people are using their personal minutes.  Why haven’t we heard more about this study?  What else is in the archives?

Implications:

There are two issues at stake here.  The first issue is one of appearances.  The good people at OnStar do not want to appear to be publicity hogs or opportunists.  If they are providing legitimate assistance based on the existence of the service, then they will not be perceived in this manner.

Of course, if they want to provide assistance without taking too much credit, they could issue reports to and through public authorities.  People living in areas impacted by the storm clearly are looking for information about how bad the situation is from location to location and in relation to past storms.  OnStar is capable of providing valuable, cross-regional insights and analytics regarding the number of incoming calls and the nature of those calls. 

There is a bigger issue at stake, though, and that is OnStar’s potential role in rule making and regulatory matters.  No car maker in the world has nearly as much data regarding real world vehicle operation parameters.  Outgoing president Chris Preuss indicated shortly before his departure that OnStar executives intended to make its database a resource for that very purpose.

Let’s hope OnStar has opened or is opening up the data archives for students of vehicle safety around the world.  All drivers stand to benefit a little bit and GM stands to benefit the most.   And the next time Mother Nature dials up a hurricane let’s hope OnStar picks up the phone.

Additional insight:

http://bit.ly/n4f4Eg - State Farm, Hughes Giving OnStar a Wake-Up Call - Lanctot - blog - Strategy Analytics

http://bit.ly/qbSM0B - State Farm, Hughes Raise Usage-Based Insurance Bar - Insight - Lanctot - Automotive Multimedia & Communications

http://bit.ly/nS7zom - OnStar Family Link Could Break Location Taboo - Insight - Lanctot - Automotive Multimedia & Communications

http://bit.ly/qSA29m - OnStar: Time to Hit the Reset Button? - Insight - Lanctot - Automotive Multimedia & Communications

At CES 2011, OnStar made headlines showing an aftermarket telematics solution which is now called, FMV (For My Vehicle).  Along with this announcement, OnStar also announced that it had secured the retail giant, Best Buy, as a distribution partner.  Securing Best Buy was a key win for OnStar, but questions remain about the extent to which Best Buy will promote FMV, how much knowledge Best Buy's staff will have about FMY, and if the staff can sell this technology to consumers?  While Best Buy was a key win for OnStar, Best Buy's motives seemed a bit unclear.  Electronic stores have been moving away from aftermarket automotive systems for a while.  These systems take up key real estate on the floor as well as additional real estate and staff for installation bays.  Even PNDs, which do not require installation, have been receiving considerably less floor space as they were quickly eclipsed by tablets as the new hot item.   Furthermore, the move seems a bit strange given Best Buy's recent push into the mobile handset market.

In contrast to OnStar, Hughes Telematics has targeted other channels of distribution.  In July, Hughes announced its partnership with American insurance company, State Farm, to bring insurance telematics to consumers.  Today, Hughes announced another breakthrough partnership, this time with AAA Club Partners.  AAA Club Partners is holding company comprised of 10 American Automobile Association (AAA) Clubs and the combined membership is almost 12 million across 20 states.   Unlike FMV, Hughes' solution can be self installed and features two-way voice connectivity for emergency services, enhanced AAA roadside assistance, and hands-free calling as well as vehicle diagnostics, location and speed alerts, vehicle diagnostics, and stolen vehicle locations assistance.  The solution offered by Hughes is also less intrusive, as it does not require replacing the OEM installed mirror, and instead plugs into the OBD-II port.  

The approaches to distribution differ in many ways.  Hughes appears to be creating strategy partnerships with organizations that are potentially stakeholders.  These companies are not just trying to profit on hardware and service but differentiate their service and enhance customer experience.   Furthermore, these organizations understand their customer base and can attempt to entice the right consumers into adopting telematics services.  This approach is very focused and alligning interested stakeholders could help reduce cost for all parties.   Given that OnStar has spent considerably on advertising to build its brand, perhaps its broader approach will work out, but Strategy Analytics' remains dubious given concerns about the current cost of FMV and early empirical data suggesting little consumer interest.  

Additional Insights:   OnStar: Time to Hit the Reset Button?

State Farm, Hughes Raise Usage-Based Insurance Bar

Yamei Puts Dealers in the Telematics Driver’s Seat

Usage-Based Insurance Brings New Competitors to Telematics Market

It’s summertime in the U.S. and once again people are traveling on vacations and dying in violent crashes throughout the country.  Under these circumstances, the automotive industry’s focus on enabling Twitter, Facebook and Pandora in the car seems particularly out of step with the needs of motorists and first responders.

The more basic need of providing first responders with emergency contact information and the relevant personal health information of vehicle occupants continues to go unmet.  Crash rates and fatalities may have declined in the U.S., but millions of people are still injured in crashes every year and hundreds of thousands suffer life threatening injuries.  Getting proper care to crash victims in the crucial “golden hour” should be the primary objective of any telematics system – or any car maker for that matter.

Existing telematics services provide for the connection to emergency contacts, but only at the request and approval of the customer.  Neither law enforcement officers nor emergency medical technicians have timely access to either the emergency contact or personal health information of crash victims.  And with more seniors behind the wheel each year as the population ages, the need to get personal health information to first responders is increasingly important.

An ongoing unmet need

 In spite of the wider deployment of safety systems and the adoption of vehicle connectivity solutions, the post-crash proposition has remained largely underserved.  OnStar and BMW tout the ability of their on-board systems to notify responders of the severity of a crash, but they have done nothing to close the gap in helping to identify victims and share their urgent care information.

What is different about vacation season this year, in the U.S., is the raised profile of the Yellow Dot program, a nine-year-old initiative to speed accident victim medical information to emergency responders by arranging for passenger information to be stored in the vehicle glove box with a yellow dot to alert responders to its presence.

The rear window-mounted yellow dot (pictured).

The interest in Yellow Dot reflects the program’s simplicity.  But the program’s simplicity masks its shortcomings.  And more sophisticated solutions already exist.

Participants in the yellow dot program, which has no formal nationwide coordinating authority, obtain a yellow dot decal from local law enforcement representatives and affix the decal to the inside of the rear window of their car.  The decal alerts emergency responders to look in the vehicle’s glove box to locate a personal identification card or folder with emergency contact and medical information about potential crash victims in the car.  That card or folder can include a picture or pictures to speed identification of crash victims.

Widespread, but piecemeal adoption and shortcomings galore

It sounds and is simple, which is why thousands of drivers in dozens of counties across eight states have adopted the program.  The problem lies in the analog roots of the program. 

With no coordinating national authority there are no set standards for the information included in the glove box.  Further, there are no standards for EMS access and use of the personal information, nor is there a central authority to assess the effectiveness of the program or to ensure the digital distribution of the vital victim information.

Even worse than these shortcomings is the patchwork implementation which has been proceeding on a county-by-county basis in those states that have embraced the program.  For a program such as Yellow Dot to have a significant impact on saving lives, speeding appropriate care to crash survivors and enabling the timely notification of emergency contacts will require nationwide adoption.  The fact that the program has been in place for nine years with such an anemic response speaks volumes.

There are other shortcomings to Yellow Dot.  Three violent and fatal crashes that occurred in the Washington, DC metropolitan area (where I reside) in the past week resulted in demolished or burning vehicles which would not allow a responder to access the materials in the glove box.  There are also privacy concerns associated with a program that alerts anyone to the presence of personal health and contact information in the car.

A problem seeking a cloud-based solution

But there is a more fundamental flaw in leaving the process of identifying crash victims and their medical needs via a document stored in the glove box, rather than in a secure off-board location.  This problem is clearly crying out for a cloud-based solution.

The need for the program is great, with millions of people injured in car crashes every year in the U.S. alone.  In fact, the Yellow Dot program has been targeted specifically toward seniors who are more likely to have medical issues relevant in an emergency response situation.

Not surprisingly, there are alternatives to Yellow Dot that do provide access to off-board databases.  Two QR code-based solutions are tied to private personal health record databases.  Lifespire’s Code Amber Alertag uses a QR code which, when scanned, grants access to the user’s personal health rercords and emergency contacts.  The service was designed for developmentally disabled individuals.  Mycrisisrecords.com offers a similar service allowing a couple of different ways for EMTs to access personal health information online.

The problem with both of these solutions is they are built around private databases not subject to industry standards or oversight.  (And at least one of these private solutions requires a subscription.)  This challenge is crying out for a solution such as that provided by MedicAlert.  MedicAlert is a prime candidate to solve this problem not only because it has the server-based system in place but because of the organization’s 50+ year history of working with the first responder community and the fact that it already has millions of members.  (MedicAlert also has the advantage of being supported by Microsoft’s secure HealthVault service.)

Still need to ID the driver and victims first

But MedicAlert will have to greatly expand the scope of its service to support such a program and it does not solve the emergency contact problem.  MedicAlert still requires responders to make contact with its database via telephone and password.  It still is left to responding law enforcement officers to first identify the crash victims.

As described earlier, existing telematics systems and roadside assistance services provide for connecting with emergency contacts, but only with the customer’s consent.  In the event of an unconscious or badly injured driver or passenger, valuable time can be lost attempting to get consent to reach out to these emergency contacts.

A low-tech solution from Roadside Telematics that leverages the National Law Enforcement Telecommunication System (NLETS) has been available for as long as Yellow Dot.  But Roadside Telematics requires adoption by a third party such as an insurance company or car maker to reach the market.

Working with NLETS and third parties, the Roadside Telematics solution ties the emergency contact information to the vehicle identification number (VIN).  By working with law enforcement, Roadside Telematics ensures personal information does not fall into the wrong hands or is misused.  In addition, the cooperation of law enforcement and the connection with first responders helps ensure the information is accessed in a timely manner and is shared with first responders and enables appropriate communication with emergency contact

Illustration of the sequence of NLETS VIN# ID/ECON (Identification/Emergency Contact) system transactions (SOURCE: IHE ITI ID/ECON White Paper, 2008)

It seems odd that the challenge of identifying crash victims and notifying emergency contacts remains a problem. With weekly reports of personal information being accessed illegally and with wireless broadband connectivity nearly ubiquitous the fact that auto makers have not closed this gap with the emergency response community seems absurd.

In his recently published book “Detour: My Unexpected, Amazing, Life Changing Journey with OnStar,” former OnStar president Chet Huber tells the story of an OnStar operator contacting the wife of a doctor who had accidentally shot himself in the chest so that she could comfort her husband while emergency responders were en route. The chief executive of 95190, which provides call center services to Lexus in China, has shared similar tales of call center operators directly contacting family members of an injured party at the request of the victim.

These stories are exceptional, and they mask the reality of first responders being unable to identify crash victims, their emergency contacts or their existing medical conditions. 

Formal notification of emergency contacts or next of kin, though, is best left to appropriate authorities. The police are trained in handling these matters in an appropriate and timely manner. Police officers are also mindful of the danger of frightened family members potentially racing to a crash scene and causing additional injuries on the way.

Implications:

The Yellow Dot program has the charm of an out-of-date analog solution to a very digital problem. The delivery of personal health record information and the sharing of emergency contact information should be left to appropriately trained professionals and secure off-board systems.

The use of QR codes, though clever, convenient and compelling, is an invitation to identity theft. And at a time when people’s personal information is frequently being used against them, the Yellow Dot actually has all the charm of a scarlet letter, notifying the world of the driver’s potential health issues or handicaps.

With the increased use of vehicle connectivity solutions and the ability to sign up customers at the time of the vehicle sale or afterward on a purpose-built Website, the Roadside Telematics proposition provides a safe, secure solution for identifying victims and their emergency contacts and can close the emergency response gap in combination with a service such as the existing MedicAlert/Microsoft HealthVault partnership. 

There is also a powerful economic incentive for auto makers to solve this problem in Western countries where the wired and wireless infrastructure and public service access point networks are sufficiently evolved to support these solutions. If the problem can be solved in the developed world, there is money to be made deploying these solutions in the developing world where accidents, injuries and fatalities from road accidents are much higher.

The next move is up to the car companies. Once the urgent needs of potential crash victims have been seen to, there will be plenty of time for Twitter, Facebook and Pandora.

Additional insights:

http://bit.ly/nwESkw - Chleon Answers Call for Secure Service Delivery Platform  - Lanctot - Automotive Multimedia and Communications Service

http://bit.ly/ojAJ1y - ChinaL The OEM Telematics System Landscape - Xu - Automotive Multimedia and Communications Service

http://bit.ly/qSA29m - OnStar: Time to Hit the Reset Button? - Lanctot - Automotive Multimedia and Communications Service

Nearly a year ago at the Telematics Update Content & Apps event in San Diego I was asked why the industry hasn’t simply standardized car stereo interfaces to ensure a safe, predictable experience in all cars. This simple question – which some might even regard as absurd – struck at the heart of the challenge of automotive HMI development. It also implied two other questions: Are we making any progress in HMI? Is there an ideal automotive HMI proposition?

The answer to the former question is “yes,” and the answer to the second question is “no.”  Automotive HMI is the great dashboard differentiator.  Like so much in the car, it is an art leavened with science and a science often overwhelmed by art.  And now you can stir marketing into the mix.  OEMs regard HMI as an essential element of vehicle branding.

After more than 100 years of designing cars, each dashboard remains a blank slate upon which a car maker and its suppliers carve their vision of in-vehicle interaction.  And even industry alliances have made little headway including, most recently, the GENIVI Alliance and the Car Connectivity Consortium (CCC).

GENIVI has left itself out of the HMI conversation seeing HMI as an inherently differentiating technology that is contradictory to the non-differentiating code sharing objectives of its charter.  The CCC’s Terminal Mode connectivity specification, on the other hand, focuses on both connectivity technology and HMI and has stepped directly into the HMI crossfire.

 Car Connectivity Consortium ventures where GENIVI fears not tread

Far from getting easier with each passing decade, the automotive HMI experience becomes more complex as choices multiply with the emergence of new technologies.  The CCC has sought to toss a lifeline to automotive designers with its safe mobile-phone interfacing credentials but, so far, only 18 companies have seen fit to join the consortium.

The industry is caught in the vortex of an HMI remix as the imperative to integrate wireless devices takes hold.  Dials buttons and switches are suddenly passé.  (In fact drives for removable media are on the way out as well.) 

The CCC spec attempts to define the parameters of a cross-platform mobile device interface that will enable screen replication of the mobile device modulated by policy management elements.  But the Terminal Mode proposition is being undermined by the more powerful urge in the industry to differentiate.

The challenge for OEMs is great.  Wireless devices arrive in the market having passed through several different hands including the hardware manufacturer, the software and operating system provider and the wireless carrier.  All of this means that car makers face a perplexing decision making process with no easy right or wrong choices.

The issues at the heart of this decision making process are the choice of connectivity technology and the HMI strategy for enabling safe and convenient and, hopefully, intuitive driver access to on-board and off-board services and content.  The connectivity technology candidates include: Terminal Mode, Bluetooth SPP, USB, Wi-Fi, Aux In, iPod Out and VNC.

Each of these connectivity solutions has the tacit or stated approval of different OEMs, Tier Ones, handset makers and carriers.  Each of these solutions also has significant HMI implications regarding device control of the dashboard or vehicle HMI control of the device.  One of these technologies, Terminal Mode, is supported by an industry consortium: the CCC.

While the involvement of an industry consortium implies broad industry support for a solution that can build market momentum, it also implies stagnation and compromise.  The automotive industry has lost patience with stagnation and compromise and is rushing new systems to market at an unprecedented pace.

Terminal Mode being left behind by OEM rush to connect

Terminal Mode was intended to speed mobile device integration efforts by defining a protocol for safely reproducing the mobile phone interface in the dashboard.  The thought process was that consumers would prefer to access their mobile device functionality on a larger screen with much of the familiar device-side HMI preserved.

Unfortunately for Terminal Mode supporters, the market has galloped forward without waiting for the organization’s standards setters.  Ford and its SYNC platform are partly to blame for this industry disconnect.  With Ford surging toward 3M SYNC systems installed, competitors have felt pressured to move ahead without the CCC.

For its part, the CCC has struggled to establish its global credibility having been born from a group of German car makers in concert with Finnish handset maker Nokia.  The leadership of CCC was then put in the hands of Nokia, according to its current president, who is a Nokia director.  Of course, after its recent significant global market share loss Nokia now faces much higher priorities than focusing on a global standards-based mobile device integration campaign.

To further complicate matters, Nokia’s weakest market is the most essential market for mobile device integration: The U.S.  (Nokia’s current smartphone share in the U.S. is estimated by Strategy Analytics at 2%.)  Smartphone connectivity in the car is currently being pursued in the industry mainly with the objective of enabling access to streaming music content.  The U.S. is the largest music market in the world.

Ford and Fiat show the way

There are actually three essential application areas for smartphone connectivity in the car: communication, navigation and entertainment.  Communication was the first to be resolved with Bluetooth hands-free phone interfaces enabled by voice technology.  Fiat and Ford were leaders in this integration effort.

Navigation was the next priority for smartphone connectivity.  Here, again, Fiat and Ford have led the way with mobile device integration solutions enabling navigation.

Ford has also been in the forefront of entertainment content integration from a mobile device.  In fact, Ford’s consistent and fast-paced success has put extraordinary pressure on the industry to respond.  Terminal Mode arose as a cross-platform mobile device integration alternative to Ford SYNC and Fiat Blue&Me but its arrival has highlighted the limitations of the automotive industry’s well-established consortium-based standards setting process.

As an unproven lab-produced standard Terminal Mode is subject to the ongoing tinkering of consortium members, including those that might block advances.  But even under the best of circumstances its success can be undermined by a lack of market adoption by makers of handsets or head units.  In fact, even wireless carriers have the power to interfere with Terminal Mode’s progress especially as they begin to play an increasingly assertive role in the telematics market.

Notable names among CCC members, non-members

CCC members include OEMs Toyota, GM, Volkswagen, Daimler, Honda, Hyundai and PSA.  Notably absent from the CCC’s member list are Ford, BMW, Nissan, Renault, Audi, Jaguar Land Rover, Chrysler, Kia, and Fiat. 

The list of head unit makers among the CCC membership is also short but includes Alpine, Delphi and Denso.  The list of center stack system suppliers not included among CCC members is long and includes Continental, Bosch, Harman and JCI, all of which have their own connectivity solutions.  Most notable by its absence is Clarion which has adopted RealVNC’s technology which is based on the same VNC technology of Terminal Mode.

Samsung, Sony, HTC, and LG Electronics are all named as examples of handset makers that have joined CCC and will support the Terminal Mode protocol.  Apple, RIM and Google are still missing from the CCC membership list which does not include a single wireless carrier.

In spite of being a CCC member, GM has already chosen its own proprietary path with the announcement of its MyLink Bluetooth SPP-based smartphone connectivity system.  MyLink might one day adopt Terminal Mode protocols, but today has nothing to do with the CCC.

Produced in cooperation with Panasonic Automotive and QNX, GM took over the MyLink brand from OnStar.  (OnStar’s MyLink smartphone app is now called RemoteLink and is on its own development trajectory.)  Similarly, Toyota, another CCC member, is pursuing its Entune Bluetooth SPP-based connection with Terminal Mode nowhere to be found.

Harman pushing Aha Radio

Harman is not currently a member of CCC and is aggressively pushing its Aha Radio connectivity application with what company executives call a “small licensing fee.”  In other words, Harman is seeking to push Aha Radio into any platform it is currently engaged in or bidding on.

A worthwhile side note on this interface struggle is the central role now being played by Pandora.  Pandora is a special case because it is a standalone application requiring its own unique software code and with a business model that does not allow subsidies or revenue sharing.  Ford was first to enable voice access to on-device and streaming content including, last year, voice access to most Pandora functions such as skip, thumbs up/down and channel selection.  Ford's interface remains unique in this respect.

BMW was next to enable Pandora smartphone integration, but has not enabled voice integration, preferring to use its physical i-Drive controllers.  Mercedes has also enabled Pandora access.  GM has now arrived with MyLink – shipping later this year – with voice integration and touch screen control, like Ford.

Pandora is not part of Harman's Aha Radio application portfolio, possibly because Aha Radio is ultimately intended to be an advertising platform with revenue sharing.  That prospect rules out inclusion of Pandora whose licensing forbids revenue sharing.

Each of these OEMs has taken a different approach to representing apps on an in-dash display.  Not one of these companies, though, has chosen to reproduce the handset HMI.  At the same time, though, each of these OEMs is known to be investing heavily to enable their individual app experiences a cost burden Terminal Mode is intended to alleviate while also requiring some loss of control.

Implications

Terminal Mode may yet have its day in the dash(board).  The CCC consortium supporting Terminal Mode has ventured upon sacred ground for the automotive industry: dashboard HMI.  Car makers jealously protect this differentiating real estate.

It is fitting that the battle is playing out in Detroit which is ground zero for audio decision making worldwide.  It is also worth noting that Apple has guarded its HMI experience not unlike a car maker with enviable success.

The growing importance of wireless carriers and their knowledge of user interfaces may yet play a decisive role which may alter the current development trajectory.  Handset makers are also stepping forward with their own ideas and priorities.

With that in mind, we think the CCC faces steep obstacles in convincing car makers to surrender some control over HMI in the interest of cross-platform scalability and cost reduction.  It is an admirable effort and one that may lead to technical breakthroughs relevant in other application verticals such as V2V connectivity.  But when it comes to entertainment, communications and navigation, car makers may have too much at stake to play along.

Further Insight:

http://bit.ly/oQaPOr - #RealVNC: A Dark Horse in the Connectivity Race - Insight - Lanctot - Strategy Analytics

http://bit.ly/nwESkw - #Chleon Answers Call for Secure Service Delivery Platform - Lanctot - Insight - Strategy Analytics

http://bit.ly/oS67Rg - #Pandora, #Spotify, #Sirius XM Vie for Automotive Subscribers - Lanctot - Insight - Strategy Analytics

Speaking at the Center for Automotive Research’s Management Briefing in Traverse City this week, OnStar’s president touted the organization’s plans to pursue initiatives in global markets from Latin America to the Middle East. We hope OnStar is not losing sight of some basic blocking and tackling opportunities closer to home.

OnStar has yet to realize the monetization opportunity of its extraordinarily powerful platform. That so-far missed opportunity was nowhere more in evidence this week than with the announcement from State Farm and Hughes Telematics (HTI) of an aftermarket telematics system offering everything from vehicle diagnostics to stolen vehicle tracking and usage-based insurance – all integrated and delivered via the Internet and a smartphone application.

The State Farm announcement pointed up OnStar’s failure to create its own unique insurance solution somewhere along its 15-year history. Imagine for a moment, a dealership insurance selection process to be handled by the F&I department that would allow customers to check a box authorizing OnStar to share their driving data with their insurance company in order to receive a discount.

It is especially noteworthy that GM for years had a captive insurance partner in GMAC which, to this day, only offers an odometer-based insurance product to OnStar customers. Of course, GMAC is no longer owned by GM and this insurer’s poor ranking (based on number of policies) in the industry is a further reflection of the greater failure of OnStar.

Insurance companies would like nothing better than to pay GM for the customer data necessary to manage the usage-based insurance model. GM’s failure to foresee and enable this has left the door open to a budding telematics aftermarket and it is just the beginning of an emerging battle for control of the customer.

The importance of the State Farm launch goes well beyond the simple proposition – at least it seems simple – of an auto insurer plugging a module into a vehicle’s OBDII port. The State Farm initiative reflects the importance to State Farm of altering its relationship with its customers.

State Farm's emergency button will now be increasingly available to drivers in need of assistance at crash scenes. This is a fundamental rewriting of the rules of post-crash protocols as auto insurer State Farm will now have the opportunity to not only take direct responsibility for post-crash customer care, but will also have a hand in post-crash vehicle care. (It may seem crass, but it is vital to State Farm’s financial interest to handle this proposition directly.)

There are other new opportunities inherent in the State Farm offer. Automobile dealers around the country will be well advised to contact one of the 18,700 agents in their vicinity to bring them in for State Farm UBI days < - that’s my idea, State Farm, but it’s not trademarked.  (Worth noting that State Farm has described no such plan or initiative - but, hey, it's time to start thinking outside the box!)

Not only might drivers be eligible for discounts, the smartphone app provides a diagnostic x-ray application for the vehicle. Maybe that local dealer can get their service department’s phone number programmed into the device or have it set up to send an SMS message. (Again, just my crazy idea - not State Farm's.)

Implications

It’s not too late for OnStar to wake up and realize the platform’s real potential. It’s also not out of the question for OnStar to simultaneously pursue new product and service initiatives at home and abroad.

All OnStar needs to do to find success is realize that it is a 15-year-old start-up. It’s time to forget about that parent company GM, OnStar, and put the pedal to the metal. Any further delay for OnStar will only leave more opportunity for aftermarket players, like State Farm, to sweep in and steal the business.

Strategy Analytics' broader range of specific recommendations are detailed in: 

Additional insights: http://bit.ly/oapWOj - OnStar: Time to Hit the Reset Button? - Lanctot - Insight - Strategy Analytics

http://bit.ly/qbSM0B - #StateFarm, #Hughes Raise Usage-Based Insurance Bar - Lanctot - Insight - Strategy Analytics

http://bit.ly/pLNDLr - #OnStar #FamilyLink Could Break Location Taboo - Lanctot - Insight - Strategy Analytics