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As Onstar has demonstrated, the major near-term opportunity in wireless services is services while on the road. It uses cellular phones but the technology is obscured as the car has become the delivery platform for the services.

Until six months ago, Onstar was quietly building up a mobile services powerhouse and is now beginning to throw their weight around.

Their 800,000 subscribers statistic is probably a little misleading. Since luxury cars come with 1 year of Onstar bundled into the price, those “subscribers” may not even be using the service at all. The telling factor will be what their churn is like at the end of the one year cycle.


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Wednesday August 08 12:00 PM EDT

AT&T Wireless to ride with DaimlerChrysler By Sandeep Junnarkar CNET

Automaker DaimlerChrysler announced Wednesday that it has selected AT&T Wireless to provide voice and data services in its Chrysler vehicles in the United States.

Telematics–the use of wireless and satellite communications devices in cars–is a service that automakers are increasingly offering to consumers. It can include the ability to receive roadside emergency assistance, hands-free cellular telephone calls and help with road directions–and even trade stocks.

The advanced telecommunications services offer another source of revenue to carmakers beyond the initial sale, financing fees and maintenance charges.

Financial terms of the partnership were not disclosed.

Although DaimlerChrysler offers telematics in its Mercedes-Benz line, it is well behind the curve on its U.S. line of cars. General Motors is on cruise control with about 800,000 people subscribing to OnStar–a system found in roughly one out of every four GM vehicles. Other automakers, such as Toyota’s Lexus and Honda’s Acura, have signed deals with OnStar, which debuted about three years ago as an option on Cadillac luxury sedans.

Last year, GM’s OnStar unit struck an alliance with Motorola to develop and manufacture wireless devices for cars.

DaimlerChrysler said Wednesday’s alliance reflects the company’s strategy to align itself with specialized partners, rather than only attempting internal technology development.

Chrysler vehicles equipped with telematics may hit the road as soon as the end of the year, the carmaker said.