Verizon quietly lowered the price of "Hum" earlier this year in a move that may signal the carrier is having trouble finding traction for its after-market connected vehicle offering in a very competitive market.
The biggest U.S. carrier introduced Hum last August, rebranding the "Verizon Vehicle" program that launched in January 2015. Hum comprises a small car-tracking device, a Bluetooth connected speaker and a smartphone app, essentially enabling users to make older cars smart vehicles.
The offering is compatible with more than 150 million passenger vehicles on the road today, and because it has its own modem Hum users don't have to be Verizon customers. So in a way Hum is an OTT telematics service.
Hum launched last year with two-year subscription plans starting at $15 a month plus taxes and fees. The subscription included equipment, which Verizon valued at $120.
But the carrier restructured its pricing model for Hum earlier this year, lowering the monthly fee to $10 and charging $50 for the two devices and adding a one-time activation fee of $20. Two years of Hum service now costs $310 plus taxes and fees; it had previously cost $360 over two years.
The move was first noted by Wave7 Research.
A Verizon spokesperson declined to say directly why the price was dropped, but said the carrier is "beginning to see traction and increasing demand for Hum. One success factor has been customer feedback," she continued, "which has helped to ensure that we are creating greater value for our customers."
And CFO Fran Shammo mentioned Hum in the carrier's recent earnings call, saying Hum devices were a "large contributor" to the 176,000 connected gadgets other than smartphones and tablets that Verizon added during the latest quarter.
But it's likely that the price was cut due at least in part to a lack of uptake. The Hum app has been downloaded from Google Play between 50,000 and 100,000 times, while Android users have downloaded OnStar's RemoteLink between 1 million and 5 million times.
OnStar is a well-known player in consumer telematics, of course, and its app is more feature-filled than Hum, so comparing the two isn't completely fair. But Android apps from carmakers such as Honda and Mercedes – which, admittedly, also differ from Hum -- appear to have generated a similar number of downloads as Verizon's offering. And those apps are designed exclusively for owners of those cars, seriously limiting their reach.
The addressable market for connected car kits teems with potential, obviously, but it's also an ultra-competitive space where OnStar competes with auto manufacturers as well as lesser-known players such as Automatic and Vinli. Whether the nation's dominant mobile carrier can differentiate its offering in the emerging space is far from clear.
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This article was updated April 22 to include Shammo's comments on Hum uptake.