In-car internet has been a goal for car makers and mobile operators for years, but little progress has been made – until now. Mobile News discovers how connected cars could boost revenues and even save lives
There are many things to consider when buying a car: engine size, fuel efficiency, safety features, plus comfort and entertainment specifications such as CD players, electric windows, heated seats or in-built satnav perhaps.
Access to the internet is probably
not on the list. But that could be about to change.
According to the GSMA, around 50 per cent of all new cars sold globally by 2016 will be connected to the internet in some way, covering a wide range of uses including entertainment, safety and even the potential to reshape the way drivers pay for their insurance.
The GSMA predicted in 2011 the number of connected devices would increase from 9 billion to more than 24 billion by 2020 – worth in excess of $1.2 trillion to operators globally.
With an average of 165,000 cars built every day (equating to 60 million a year), the ‘connected car’ market will provide considerable revenue opportunities to the market and could soon become the next ‘must-have’ for consumers.
Regular readers of Mobile News will have read similar stories before and will know that despite much talk about connected cars, little has actually been achieved so far.
Attempts have been made, though. Car giants General Motors and Ford each launched their own versions of ‘connected cars’ in the US in the early 1990s, and BMW, Volvo, Toyota and Honda have dabbled too, but with limited success.
But the GSMA is pushing the market hard through its Connected Car forums – a platform for car manufacturers and mobile operators to collaborate and share information, remove barriers and increase the speed at which the technology is developed and also taken up.
Forums have taken place all over the world since June last year and arrived in London last month (September 12 and 18).
And this year’s Consumer Electronics Show was packed with connected cars from all the major car manufacturers, an indication that the business may be on the verge of a breakthrough.
GSMA mAutomotive director Francesca Forestieri told Mobile News the industry alignments will help drive the connected car market forwards.
“Typically, operators and automakers haven’t worked together directly, so we have come together in the GSMA’s connected car forum to look at that,” says Forestieri.
“Earlier eff orts were mostly technology- driven rather than about what consumers wanted.
“There was also a diff erence between business models that were being used and the whole broadband environment, and the idea of everything being connected wasn’t really there in the 90s.
“Now people are expecting to have all kinds of connectivity and everywhere, but there are a lot of specific obstacles.”
Toyota special projects general manager Derek Williams says the UK has lagged behind because of the lack of a domestic car industry, but he says that connected cars will start to make their mark here within 18 months.
“Car makers tend to launch fi rst in their home countries – Toyota has got the best offering in Japan, General Motors has got the best offering in the US,” he says.
“With things like mapping it is very country specific content, so you also start in the market where you already have a lot of sales.
“The UK hasn’t been a pioneer because there is no strong domestic car industry, but it won’t be left behind in the long run.”
So what will the future look like? ‘Connected car’ connections are likely to vary drastically in complexity and capabilities.
The most basic way in which cars are likely to be connected is through an embedded SIM card built into the car to issue emergency calls for help and transmit diagnostic information on a car’s status and use.
SIMs will automatically contact the appropriate emergency services when the vehicle is involved in an accident. A similar service is offered already in parts of the world, including the US, and even disables the car engine.
The European Union is set to give this form of car connection a huge boost when regulation comes into force in 2015 or 2016, requiring all new car models sold in the EU to be able to automatically call the emergency services following a crash or other emergency.
The UK did not sign a memorandum of understanding on the regulations, but is likely to be covered by them nonetheless.
Both emergency calling and diagnostic communication are likely to be provided free of charge to consumers, but other services provided through embedded SIMs, such as mapping and traffic information, could be charged.
Orange Business Services director of marketing for connected cars Samuel Loyson says the services will require resilient SIMs able to stand up to high temperatures and strong vibrations, and connections will have to be “reliable”.
“The services that you are providing are critical – for emergency, quality of service and coverage is critical,” says Loyson.
“Coverage you can cover with roaming agreements. But then you also want to provide service-level agreements and quality-of-service engagement, and for that you need more than a standard roaming agreement.
“You need strong collaboration, so on top of standard roaming agreements we set up processes and agreements to deliver engagement on quality of services.
“So you don’t need much bandwidth, but when you do need to place a call it needs to reach its destination.”
Connected cars will also help car manufacturers get closer to their customers. Information fed back to them via the operators – based on agreements – will allow companies to monitor both the driver and the car.
Examples include live data on distances travelled, insurance and tax renewals, plus the ability to alert them when things such as tyres or brake pads should be checked or changed.
Toyota Telematics last year announced its intention to offer affordable connected vehicles.
Williams says: “People see it as giving customers a better experience in the car, and therefore selling more cars.
“Normally once you sell a car it is very difficult to keep in contact with the customer, but with the customer’s permission we will be able to see how many miles they have driven, and give them a better service reminder than we can do today.
“Around 50 per cent of all new cars sold globally by 2016 will be connected to the internet in some way”
Internet-connected cars represent a potentially lucrative market for mobile operators, who could push in-car infotainment as well as more bandwidth-heavy services
“That means we should be able to do more after-sales business, such as repairs and servicing, which generally is the more profitable side of the car business.”
Full article in Mobile News issue 524 (October 8, 2012).
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