OnStar sells back unused minutes to Verizon, giving away car in March

Automotive News sat down with a few principles and a handful of market analysts for a piece on the future of General Motors' OnStar system, and in the process revealed a few interesting facts about GM's telematics service.

The crux of the piece is that OnStar has fallen behind in the connectivity space to its rivals, specifically Ford's SYNC system, Toyota Entune and Hyundai's upcoming BlueLink system – currently the closest rival to OnStar's safety and assistance services. However, GM is getting back in the ring with its new MyLink system, which is set to hit select Chevrolet vehicles later this year.

OnStar is attempting to expand its marketshare by making the service available to non-GM vehicles in 2011, allowing consumers to purchase a $299 OnStar-equipped mirror (not including installation at participating Best Buy locations) and access all the features – from navigation to safety services – for a nominal monthly fee.

Interestingly, OnStar was the only profitable part of GM from 2005 until the automaker's bankruptcy in 2009, and not only that, but Verizon – the carrier that provides data services to OnStar-equipped vehicles – buys back unused "minutes" from GM, bringing the telematic unit's revenue up and over $1 billion a year.

Although analysts believe that the time for GM to expand its OnStar services to other makes and models may have passed, the aftermarket program has the potential to add even more black to the General's bottom line. To do so, GM has to expand the features beyond what's currently available to non-GM vehicles, and the company is actively working on integrating OnStar more deeply, possibly allowing remote door unlocking and other services. And to drive home OnStar's abilities, GM is planning a campaign later this month for drivers who let their OnStar subscription lapse. Press the blue button and you can win a free year of service or (cue your best Bob Barker voice) a brand new car!

[Source: Automotive News - Sub. Req.]

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