InformationWeek is reporting on new navigation features for GM’s OnStar system, now 10 years old. OnStar hardware is to become standard on all GM vehicles in 2007. The service, which costs $16.95 per month or $199 per year, has been heavily advertised in recent years and now has about 4 million users (although a substantial portion of those may be recent car buyers who have yet to actually pay a subscription fee, since the first year’s subscription is included in the vehicle purchase price).

The new plan, Directions & Connections, according to GM’s feature comparison chart, will cost $34.95 per month or $399 per year. I just have to wonder if this is really going to be an attractive package for many people, when you can buy quite nice, portable GPS navigators and databases for only a few years’ worth of just the extra cost of the new plan.

An interesting comparison might be made to Apple’s .Mac service, which costs $100 per year, but has been steadily adding features without a price increase. While I haven’t yet signed up for .Mac, every year the value improves, so I won’t be surprised if I do eventually subscribe. Apple’s focus on increasing the value of their pricey service seems more prudent than GM’s looking to squeeze revenue out of OnStar, especially since either service may do a lot to stimulate customer loyalty.

On the other hand, neither vendor has done anything, as far as I can tell, to develop their service into a platform for third parties, which might be the more lucrative source of revenue in the long run, especially as subscribers increase. It seems to me that with services such as OnStar (where the system is only used rarely, at least in situations that require a human operator) or .Mac (online), much of the cost will be setting up and maintaining the system, with relatively low marginal cost per user.

Apple seems to at least understand that .Mac’s value improves as more of its software (e.g. iPhoto, iSync) ties into the service. GM might do well to remember some wise words from its old competitor, Henry Ford:

“The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed.”