Jan 18,2001
GM's OnStar Unit Licenses Software
From Nuance for In-Car Gadgets
By Sharon Cleary
WSJ.com
SAN FRANCISCO -- Imagine you are driving to a restaurant and need directions. You could call the maitre'd or glance down to check your in-dash GPS computer screen. But both actions are dangerous because they take your eyes from the road.
Auto makers have struggled for years to help drivers use the increasing number of in-car gadgets safely. As part of this quest, General Motors Corp. subsidiary OnStar has licensed Nuance Communications Inc.'s speech-recognition software for its hands-free, in-vehicle information system.
OnStar will use Nuance technology in a new feature that gives drivers access to Web-based information by using their voice. The feature, called Virtual Advisor, will be available by the end of first quarter 2001.
OnStar said it will receive warrants that can be exchanged for Nuance stock as part of the licensing arrangement. It declined to provide additional details, and Nuance had no comment about the financial terms of the agreement, which gives the Menlo Park, Calif., company a direct line to a high-profile customer.
OnStar also works with General Magic Inc., a voice-applications-service provider. In November 1999, OnStar took a $15 million equity stake in the Sunnyvale, Calif., company and said it would use General Magic's software to offer basic Internet service to OnStar subscribers in 2000.
General Magic licenses its core speech technology from Nuance. It then develops applications on Nuance's platform and hosts OnStar's services. An OnStar spokesman said "nothing will change with our relationship with General Magic" as a result of the Nuance agreement. But some analysts expressed concern that the new alliance could hamper expansion of General Magic's future business with OnStar.
In 4 p.m. trading on the Nasdaq Stock Market, shares of Nuance were down $2.81, or 6%, to $45.94. Shares of General Magic were up 34 cents, or 17%, to $2.38.
GM launched OnStar in 1996 on three Cadillac models. The subscription service uses a Global Positioning System satellite network and cellular technology to link drivers and vehicles to a call center with live operators. For year-2001 models, OnStar is available on 32 of 54 GM vehicles, either as factory-installed standard equipment or as part of an option package.
OnStar says it has between 700,000 and 800,000 subscribers and is adding 4,000 to 5,000 subscribers a day. It expects to reach four million subscribers by 2003. One way the GM unit hopes to achieve this goal is to broaden its appeal beyond its original safety orientation to become a source of information and entertainment services.
One of OnStar's new tools is Virtual Advisor, which will allow drivers to get e-mail, traffic and weather updates, and other information from the Internet by asking for it via an in-car microphone connected to the OnStar network. "Now you have a full-time, connected relationship to dynamic information," says Ronald Croen, Nuance's president and chief executive officer. "This is the beginning of the car as a cellphone on four wheels."
OnStar will add another new feature, Personal Calling, by the end of first quarter 2001. Personal Calling, which OnStar is currently testing in the Northeast, is a wireless service that allows drivers to make voice-activated phone calls.
OnStar will charge per-minute fees for the new services, on top of the regular OnStar subscription charges.
Virtual Advisor and Personal Calling will be available on non-GM vehicles as OnStar expands its business to other auto makers: Toyota Motor Corp.'s new Lexus LS 430 sedan will offer Lexus Link, which connects users to OnStar's call center; and Honda Motor Co.'s Acura RL sedan will offer OnStar beginning with the 2002 model sold in the U.S.
OnStar subscribers can use the Personal Calling service nearly nationwide over the routing network of Verizon Wireless, the wireless arm of Verizon Communications Inc. of New York, which was formed by the merger of Bell Atlantic Corp. and GTE Corp. But drivers won't know Verizon is handling their calls: An OnStar button, not a Verizon button, connects callers to a circuit-switched network.
In September 2000, Verizon broke ranks with the wireless industry by backing legislation that would ban the use of handheld cell phones while driving.
Meanwhile, both GM and Ford Motor Co. launched safety campaigns in the past few months. In October 2000, GM dedicated $10 million to research and education about the safe use of new technologies in automobiles. Ford has committed $10 million to its similar initiative, which it rolled out earlier this month.
Safety problems related to new features have challenged auto makers for years. In 1986, for example, GM installed a computer just above the Buick Riviera's center console, but the company quickly learned that the option could be unsafe at any speed.
Drivers were able to instantly adjust the heat or air conditioning, scan radio stations or check the outside temperature by touching the computer screen. But some drivers unfortunately devoted more attention to the computer than to driving, and the Detroit auto maker discontinued the computers after a few years.
"More and more features will be operated using speech-recognition systems in vehicles," says Onstar spokesman Todd Carstensen. It's a good way to "institute technology into vehicles without causing distraction."
Write to Sharon Cleary at sharon.cleary@wsj.com |
