(FORTUNE Magazine) – In the late 1990s, General Motors' OnStar seemed like one of those world-changing technologies. By connecting motorists to a call center, a wireless network, and the Internet, OnStar would transform the car from a mere transportation appliance into...a mobile telecommunications platform! Drivers could check their stock portfolios, chat with clients, and make reservations for power lunches on the way to work. Ron Zarrella, GM's former president of North America, predicted that OnStar would soon produce $1 billion in annual profits.

Since then, reality has intruded. It seems that (1) most people don't want to do all that stuff while they drive, and (2) if they do, they don't want to pay for it, even at OnStar's cheapest monthly rate of $16.95. Instead of becoming GM's best new idea since the electric self-starter, OnStar looks more like EV1, the now defunct electric car. "It is not a secret to anyone that OnStar is having trouble getting customers," says Thilo Koslowski, an analyst for Connecticut-based Gartner G2.

It's not that OnStar isn't helpful. Real-life situations in which its operators aid distressed motorists have become popular radio commercials. OnStar has helped locate thousands of stolen vehicles through its GPS navigation transmitters. But the money just isn't rolling in. When GM announced that OnStar turned profitable last year, it neglected to mention that most of the revenue comes from GM itself, in the form of transfer payments from the car marketing divisions. Many customers get OnStar for little or no cost when they buy a GM car, so divisions like Cadillac pay several hundred dollars for the cost of installation and also pick up the bill for the first year of service. Growth is leveling off too, even though GM is installing OnStar on 113,000 new models a month. Some dealers don't take the trouble to activate the service for customers, some customers never bother to use it, and nearly half of those who do fail to renew their subscriptions after the first year. Increasingly GM executives like CEO Rick Wagoner talk about OnStar as a marketing and customer-relationship tool instead of a profit center. That makes sense. Rather than packaging OnStar with extra-cost options like sunroofs and leather seats, GM could redefine the service as a safety feature like airbags and seat belts and make it part of a car's standard equipment. Then it could advertise the genuine benefits that OnStar provides without being held hostage by the rosy scenarios of the Digital Age--and thereby keep OnStar from going the way of EV1. --Alex Taylor III