Chet Huber is selling safety, security and peace of mind. And, he says, people are buying.
Huber is the president of OnStar, General Motors' telematics unit. He offers three reasons for his claim: more than 2.5 million paying customers, renewal rates above 50 percent and financial profitability.
"The way this is being positioned is not as a substitute for mobile phones," Huber says. "This is a peace- of-mind positioning."
Few would argue with OnStar's position in the telematics industry. For eight years the company, which does not release financial results, has been at the forefront of telematics. But predictions of imminent doom long have plagued OnStar, rumors that intensified after the 2002 demise of Wingcast, the telematics venture of Ford Motor Co. and Qualcomm Inc. that never got off the ground.
Huber dismisses such concerns. But he also admits the company, based in Detroit, has faced its share of challenges. "We're still learning where the sweet spots are," Huber says.
The first version of OnStar didn't allow users to place phone calls. Subsequent versions featured rigid pricing structures.
But Huber said the company is slowly rising above its growing pains, an assertion shared by others.
"Customers are starting to see the value proposition of the service," says Frank Viquez, director of automotive electronics for research firm Allied Business Intelligence. "They're the biggest service provider out there. You can call them pioneers in this area."