Former telecommunications executive Dan Akerson wants GM to make more technologically advanced cars.
Akerson cites the growth of the tech-savy consumer market as reason for automakers to get on board with increased vehicle app technology. In the eyes of many users and reviewers, app technology for vehicles is clunky compared to that found in mobile devices.
As part of GM's objective to enhance its vehicles, the company plans to boost its 2015 lineup. The company will start selling internet-capable vehicles that will allow for video streaming in mid-2014. This should also allow for additional revenue through in-vehicle advertising.
"For example, what happens if when the logo shows on your screen, it says 'brought to you by Allstate'?" Akerson said. "How many times is that going to pop? And how much can you get from Allstate?"
GM is also earning $20 from each person who signs up for the internet service. As for OnStar, GM is enhancing that service as well. According to Citi analyst Itay Michaeli, OnStar earns about $1.5 billion in annual revenue.
GM is "arguably better positioned to capitalize on connected global trends," Michaeli said.
Some features of the new internet service will include traffic information and real-time navigation. According to an April 25 study by J. D. Power & Associates, over half of vehicles owners state that their next car would "definitely" or "probably" have wireless internet or the ability to sync with smartphones.
"People want to walk into their car and have it behave just the way the little piece of metal that fits in their pocket can do," Alexander Edwards, president of research firm Strategic Vision, said.
In lieu of the popularity of in-vehicle technology, GM was a pioneer with OnStar in the 1990s. The addition of 4G LTE will contribute to faster internet flow in its 2015 models. Akerson wants GM to take advantage of OnStar in particular.
"We do want to change this from primarily a safety and security business to one that is much more feature-rich," Akerson said.
