June 16, 2004 10:25 AM PDT

OnStar steering toward cell phones?

Verizon Wireless and in-car help provider OnStar unveiled a combined billing service that could hint at the General Motors subsidiary's possible shift toward cell phones.

For $10 a month, Verizon Wireless subscribers can use their minutes while talking on their car's OnStar hands-free embedded phone, the two companies said Tuesday. Calls also can be transferred between an OnStar phone and a cell phone, executives said.

ABI Research analyst Frank Viquez believes it's just a short jump from there for OnStar to bring specially made software to cell phones equipped with GPS ( Global Positioning System) chips. Such a move would make the service much more widely available and cheaper to offer.

Telematics equipment makers like OnStar are searching for cheaper ways of delivering their service, Viguez said. "The ones that can't, don't need such a sophisticated system."

OnStar uses GPS to offer a wide range of services to drivers, from pinpointing nearby restaurants to calling for help in the event of an accident.

Company President Chet Huber said he recognizes the "opportunity" for cell phones to replace the embedded hardware inside OnStar-equipped vehicles, "but our core value...is creating a safe, sound and secure environment."

Telematics, the technology of putting computer systems in cars, is currently a $5 billion industry. Viquez expects new calling features from OnStar and competitors ATX Technologies and Cross Country Automotive Services will help boost the market to $13 billion a year by 2008.

 

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