Chrysler adopts pay-per-use telematics strategy

The Chrysler group is basing its telematics strategy on portable cellular telephones that can "talk" to the vehicle and a pay-per-use pricing structure.

The automaker said on Thursday, Oct. 25, that it will make the system available for dealer installations in spring 2002 and offer it as a factory-installed option in early 2003.

Basing the system on a portable cellular telephone sets Chrysler apart from rival automakers' technologies, such as OnStar, which relies on a phone unit embedded in the vehicle and requires users to pay an annual fee.

The heart of Chrysler's hands-free phone telematics strategy is Bluetooth, a short-range communication technology that wirelessly connects electronic devices. In this case, the technology will be used to connect consumers' Bluetooth-enabled cell phones to their vehicles.

To make it all work, Chrysler formed a coalition of partners including:

  • AT&T Wireless to provide wireless phone service.

  • Johnson Controls Inc. for Bluetooth technology and interior integration.

  • Gentex Corp. for rearview mirror units with telephone controls.

  • IBM for speech-recognition technology.

    The companies will share the profits generated by the phone systems, though details of the business model were undisclosed. Chrysler did not reveal pricing for the system but said it would not charge consumers subscription fees for the service. Consumers will pay for airtime through their network providers of choice.

    "Over the last couple of years, the idea of being in the telematics business was a 'you make billions of dollars approach,' " said Jack Withrow, director of telematics for the Chrysler group. "This is going to be a profitable program from the get-go, … but it is not going to be a second source of riches for the OEMs."

    The system also will allow consumers to continue their hands-free conversations on their hand-held units when they leave the vehicle.

    The cell phone can be positioned anywhere in the vehicle. Calls will be activated and deactivated by pressing a button on the rearview mirror. A caller ID display will be located on either the overhead console or the radio display.

    The Chrysler system will work with any brand of Bluetooth-enabled phone and any network provider. Bluetooth phones typically cost between about $150 and $500.

    "You shouldn't expect this to be an additional revenue stream," said Thilo Koslowski, lead automotive analyst for Gartner Inc. of Stamford, Conn. "Ideally, you can recoup your investment."

    Mercedes-Benz will continue to offer its Tele-Aid telematics service introduced in 1999.

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