Garmin vs. OnStar: GM makes garmin a better deal - is OnStar next?
A few years ago, it seemed that in-car navigation systems would be the next big option. But the latest news is that cars which have factory installed nav systems actually sell for less on the used car market than those which don’t – an average of $500.00 less. Since these systems add about $2,500.00 to the sticker, that seems like a rather bad investment.
Why has the in-car navigation system fared so poorly.
And Tom-Tom’s portable competitors. They cost less, can be moved from one car to the next, and are rapidly getting a reputation as being much more accurate than the factory installed systems.
Now General Motors has added yet one more reason to avoid the factory system: it’s ending free upgrades of the system mapping.
Here’s the text of a bulletin just issued by the company to its dealers, telling them that, from now on, 2008 GM vehicles with factory nav get zero – as in none – free upgrades after purchase. As the general theory is that these systems loose twenty percent of their accuracy in a single year, it might at first seem that GM’s conceding turf to the Garmins of the world.
Change in the GM Nav Disc Update Program
Sales and Service Bulletin
To: Dealer Principals, General Managers, Sales Managers, Service Managers (Chevrolet, Pontiac, GMC, Buick, Saturn, and Cadillac
Subject: Change in the GM Nav Disc Update Program
Models: All 2008 models with factory-installed in-vehicle navigation — either standard or optional (Cadillac CTS, SRX, STS, XLR, Escalade, Escalade EXT, Escalade ESV – Hummer H2 and H3 – Buick Lucerne and Enclave – Pontiac Grand Prix and Torrent – Saturn Outlook and Relay – GMC Sierra, Yukon, Yukon XL, Envoy, and Acadia – Chevy Silverado, Avalanche, Tahoe, Suburban, Trailblazer, Equinox, Uplander, and Corvette)
The purpose of this bulletin is to inform GM dealers and dealership personnel of a change to the GM NavDisc Update Program. The program previously included two free DVD map updates for customers who purchased a GM vehicle with a factory navigation system, installed when the vehicle was built.
The program has been modified for the 2008 model year and beyond. Free DVD map updates are no longer included. This does not affect the original DVD map disc which is provided with the new vehicle. This also does not affect the owners of 2006 and 2007
model year vehicles with factory in-vehicle navigation. Those owners are still eligible to obtain a free update or updates.
DVD map updates will continue to be offered by the GM NavDisc Center. The data on the DVD map disc ages at a rate of 15-20% per year. As the data ages, the functionality of the navigation system declines. The DVD map updates are available annually at the beginning of the new model year. The updates are currently priced at $199 + shipping.
The GM NavDisc Center can be contacted for both disc orders or for assistance with nav system operation. Order discs via the website, www.gmnavdisc.com, or by phone, 1-877-NAV-DISC (1-877-628-3472). Contact information for the Center is also included in the Navigation Owner’s Manual Supplement (in the glovebox) and on the face of the DVD disc included with the new vehicle.
Any feedback on this program change should be provided to your Field Sales or Service contacts.
But there’s more to it.
GM has a massive investment in OnStar. It puts it in every new car and includes a year’s OnStar service in the purchase price. But very few car buyers re-up for year two, even for the emergency service plan. As a cell phone system, OnStar has proven a poor substitute for the one in your pocket. As a way of making restaurant reservations, it’s superfluous to premium services just about anyone can get with their credit card.
So now GM’s trying to make OnStar an on-board navigation system, one that updates instantly and automatically, because it downloads its directions to your location on demand.
It seems likely that GM’s decision to stop offering free upgrades to the in-car navigation system is intended to diminish internal competition to OnStar, which is standard equipment on every car that could be bought with the nav system.
But with the pricing for portable navigation systems at the local Circuit City or Best Buy making the purchase of one a commodity item, how long can OnStar survive?
It’s a complex question for GM.
By inventing the idea – which seemed like a good idea at the time – GM forced several of its competitors, including Lexus and Mercedes-Benz, to adopt similar systems. By including it in cars as standard equipment, GM implicitly promised to support the systems in the future.
But GM was hit with a huge technological problem when federal mandates forced cellular phone systems to leave analog and become exclusively digital. In one stroke, that made every OnStar system installed up to about the mid-point of model year 2002 obsolete. Worse, they couldn’t be converted.
GM has made a huge investment in OnStar, but it hasn’t proven popular with those who purchase its cars.
Now that it is effectively abandoning in-car navigation systems, How much longer can it be before it dumps OnStar?