Gartner Says GM's Announcement to Offer In-Vehicle Internet Access Has Great Potential to Generate New Revenue Stream.

Business Editors

SAN JOSE, Calif.--(BUSINESS WIRE)--April 6, 2000

Recent Gartner Survey Shows Higher Internet and Cell Phone

Penetration Among New Car Buyers Compared to the Average Consumer

With Internet access becoming more mobile, automobile manufacturers have a great opportunity to receive additional revenue with in-vehicle Internet access, according to Gartner Group, Inc. (NYSE: IT and ITB). General Motors released today two announcements to make inroads into offering Internet access in its automobiles.

The company announced its Telematics strategy that will ultimately offer Internet access in cars for the first time. The company will increase the breadth of its satellite-based OnStar communications service through the "Virtual Advisor" and the offering of the "Infotainment" system in selected Cadillac models.

"Operating in a mature market, car manufacturers are looking for new ways to generate revenue," said Thilo Koslowski, senior analyst in Gartner's e-Business Services group with lead responsibility for the automotive sector. "Subscription-based services like GM's OnStar is a very promising idea to create revenue. Although other car manufacturers are planning to offer similar services to consumers, GM currently is the leader in this area."

Beginning in the fall of this year, the "Virtual Advisor" will allow drivers to perform voice-activated personal calling and give them access to Web-based information like stocks, sport and traffic news. The "Infotainment" system will be able to read e-mails to the driver, display the e-mail text on a screen and offer download capabilities to a handheld computer. In addition, the "`Infotainment" system will offer navigation support and an advanced audio system. To ensure vehicle safety, both the OnStar "Virtual Advisor" and the "Infotainment" systems will be voice controlled.

A recent Gartner survey based on 40,000 household interviews showed that 70 percent of the households who bought a new car in the last six months have a cell phone and 65 percent have active Internet users. By comparison, in the average household, cell phone penetration is 50 percent, and active Internet users is 48 percent.

"Our research shows that most car buyers are comfortable and experienced in using new interactive communication technologies in their daily life," Mr. Koslowski said. "Since most people spend a significant amount of time commuting in stop and go traffic every day, in-vehicle voice operated Internet access might be a useful alternative to the 'passive' radio. The ability to listen to a business related e-mail while commuting might help to reduce a person's workload in the office. While driving home a person can check the latest online weather report and call their family to discuss weekend plans -- all voice activated and hands free."

Gartner research also showed that among all new car buyers, those consumers who spent between $50,000 and $55,000 on their last car purchase show the highest Internet and cell phone penetration with 94.2 percent and 93.7 percent, respectively, which validates GM's plans to initially introduce the new systems primarily in its premium brands.

Additional information on the automotive online industry is available to subscribers of Gartner's e-Business Services. These programs are part of a wide range of Gartner services examining the e-business industry. These programs are designed to help senior executives, strategic planners and investors capitalize on emerging opportunities by providing research and analysis on electronic commerce and Internet marketplaces. Additional information on these programs is available on Gartner's Web site at http://www.gartner.com/public/static/home/ggebiz.html. To subscribe to these services, please call 800-419-DATA or 408-468-8009.

Mr. Koslowski will provide additional analysis during the upcoming Gartner's Dataquest Predicts 2000 Conference, to be held May 1-3 at The Westin Santa Clara. Gartner analysts will provide their outlook for the e-business industry. Members of the press can register for the conference by contacting Josh Lefkowitz at 212-320-2335, or at [e-mail]. Additional information on the event is available on Gartner's Web site at http://www.gartner.com/public/static/events/ven/ven.html.

About Gartner

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