GM 4G service price range reflects uncertainty about demand

GM's wide price range for 4G service reflects uncertainty about demand

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DETROIT -- When General Motors rolls out an embedded high-speed Internet connection across most of its lineup beginning next month, there will be a range of subscription options available for everyone from hard-core tech geeks to the technologically curious.

A vehicle owner can pay as little as five bucks a month for a few hours of streaming music to the car's infotainment system. Plunking down $50 will pipe in five gigabytes, more than enough to stream several high-definition movies to the backseat. There are three price points in between, and one-time payment options, too.

The wide pricing spectrum reflects the uncertainty around future demand for GM's 4G LTE service, analysts say. Owners who rarely travel with passengers may not see value in the ability to connect seven wireless devices to the 4G hot spot connection. The same goes for those who now use a smartphone connection to stream music and access other data behind the wheel, analysts say.

And one feature that could have widespread appeal has been put on hold. GM had planned to introduce simultaneously a suite of about a dozen applications, including ones from the Weather Channel and National Public Radio, that owners could access through the infotainment system without fumbling for their smartphones. GM has delayed the rollout, citing quality snags.

"I'm not sure what is going to be the hook for getting people to pay" for the 4G service, says Mark Boyadjis, a senior analyst at IHS Automotive who specializes in infotainment technologies. "A lot of people will ask: 'Why do I need Wi-Fi access in the car?'"

GM is embarking on the industry's broadest deployment of 4G LTE Internet service, starting in June with the 2015 Chevrolet Malibu. The 4G feature, which is several times faster than widely available 3G service, will be available through GM's OnStar system in more than 30 Chevy, Cadillac, GMC and Buick nameplates for the 2015 model year.

GM cites the Internet hot spot as a key advantage of an embedded connection that smartphone-based systems, such as Ford's Sync, don't provide. GM says the embedded service also will provide a faster, more reliable connection than existing mobile devices -- zippier speeds for features such as weather and traffic updates and other apps run through the infotainment unit.

GM believes the 4G feature will be a differentiator that will help it sell more cars.

"It's all about bringing more value through the connection to the customer," OnStar COO Terry Inch says.

Vehicle buyers will get a free taste of the service initially: three months or up to 3 GB of data, whichever comes first.

After the trial period, owners can pay for the service on a sliding scale based on use. Those who already subscribe to OnStar's existing safety and security service or its navigation service will pay lower rates for some monthly plans.

Thilo Koslowski, a connected-vehicle analyst at tech research firm Gartner, says offering a wide range of subscription options is smart.

"It should appeal to the casual as well as the hungry data user," Koslowski says.

He expects the cheap plans to be most popular early on, as people who now get frustrated with slow speeds of their smartphones or the applications run through their infotainment system today spring for faster service.

You can reach Mike Colias at mcolias@crain.com.


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