Cobra to add bite to Vodafone M2M

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Italian car tech innovator Cobra has been a top brand in car telematics products and solutions. How will it fare under the control of new owner Vodafone?

Vodafone claims it is in the driving seat in the Machine-to- Machine (M2M) market following its £115 million acquisition of Italian connected car technology firm Cobra in August.

Speaking in London this month, Vodafone director of M2M Erik Brenneis told journalists that the integration of Cobra’s connected car technology in to Vodafone’s existing M2M business makes it the only operator able to offer a full end-to-end service.

He claims its ability to offer the hardware, software, network connectivity and customer service in a single package gives Vodafone a position from which it can dominate the connected car market.

“Vodafone is already one of the leading companies for M2M and we already had a connected car offering, but we asked how we could grow from that strong position,” said Brenneis.

“We looked at ways we could offer more end-to-end services in M2M, not just connectivity. Cobra manufactures the in-car equipment and produces the software that the car manufacturers use it for.

“Cobra also offers service centres for features such as a crash or theft of a car, where the vehicle automatically sends a message to the centres if the car is stolen or involved in an accident. With Vodafone’s connection included, we can offer a full end-to-end service to car manufacturers.”

Vodafone completed the purchase of Cobra from majority shareholder Intek Group on August 8. The operator has now set up a 20-strong team to integrate the Italian firm into Vodafone’s M2M business. Brenneis has been appointed CEO of Cobra.

Innovative

Prior to the Vodafone acquisition, Cobra had been struggling. Despite reporting 2013 revenues of €144.6 million (£115 million) and contracts with car manufacturers including Audi, Bentley and Renault, it still made a loss of €1.8 million (£1.44 million). In March, Cobra reported debts of €48 million (£38.35 million) and agreed to a debt restructuring package.

Brenneis said that Cobra’s partners had responded positively to the Vodafone buyout. The stability provided by Vodafone’s infrastructure has reassured its partners, along with Vodafone’s plans to invest in the M2M market.

Brenneis explained Cobra will continue to operate as a subsidiary brand of Vodafone, with its 900 staff worldwide integrated in to Vodafone’s M2M division over time but the Cobra name continuing to exist.

“Cobra is currently operating as a separate company to Vodafone and we are maintaining both brands,” said Brenneis. “Vodafone is the stronger brand but Cobra has a good reputation within the automotive industry.

“What we will do, long term, is move in to an area where we are all Vodafone but some products will maintain the Cobra name.”

Cobra was founded in Italy in the late 1970s and it has developed car technology ranging from the first contactless key technology to telematics systems that have used Vodafone’s connectivity since the companies first became partners in 2010.

It manufactures hardware that can be built in to cars or sold as additional extras and has agreements with some of the world’s largest automotive firms.

Cobra also develops bespoke software that can utilise its on-board systems and send the information to a smartphone. This gives car owners access to journey data, information on car performance as well as anti-theft systems and even locking functionality.

Brenneis said it was a demonstration of how luxury manufacturer Porsche had integrated Cobra’s systems into its Cayanne, Panamera and Macan ranges that convinced Vodafone to purchase the company.

“We scanned the market and we found Cobra for several reasons. Cobra was already a Vodafone customer, using our connections for its products. What got us really interested was when we saw what Cobra developed for Porsche,” Brenneis explained.

“Cobra last year worked with Porsche to develop a system called Car Connect that consists of black box it designed and produced. That box sits under the dashboard and reads data about the car. This data is read by software that Cobra has also developed. The software manages the data, analyses it and sends it to a smartphone app that Cobra and Porsche have developed together.

“This complete value chain is important: To offer hardware, network, applications and software and service centres. Now we have became the only company that fully controls every single part of this value chain and that is very powerful for us.”

Brenneis compared the advantage this gives to what would happen if Vodafone was to merge with a phone manufacturer such as Apple.

Sales boost

Figures from Navigant Research reveal there are currently 1.2 billion cars on the road worldwide. However, according to Vodafone, only 10 per cent of these vehicles are connected via a SIM card, and not all newly released cars have a data connection.

Vodafone refused to disclose how many cars currently use Cobra technology butCobra head of business development Mark Rose said the two firms would combine sales strategies to allow cross channel selling, with Vodafone offering its own M2M products to Cobra’s manufacturing partners whilst also using Cobra technology in other M2M markets.

Rose, who moved over from Vodafone to Cobra following the acquisition, said: “Vodafone brings a large international sales force that is spread across a number of different channels with contacts in different industries.

“What we are now able to do for Cobra is use our Vodafone international sales teams to take Cobra’s capabilities and drive sales across multiple organisations.

“Cobra brings good connections across electronics, automotive and telematics manufacturers whilst Vodafone has those connections in other M2M markets.

“By bringing Cobra and Vodafone’s sales teams together, we’re already recognising big synergies in areas where we can drive a further depth of services across all of those accounts. There’s a great potential for growth.”

This sales strategy will encompass both direct and indirect channels, according to Brenneis. Vodafone already operates an all-encompassing, end-to-end direct sales offering for its M2M business. Cobra also has a direct sales team.

Cobra also provides indirect sales though various car dealerships, garages and OEMs. Vodafone will use these channels to provide other M2M services, whilst offering Cobra products through its own indirect channels.

Possible products that Vodafone could offer include Cobra’s internal analytics engine that is used to monitor a car’s performance. Brenneis said this could be adapted for use in other markets including healthcare and manufacturing.

“We will use Cobra technology in other M2M markets. We are undergoing the process of analysing what hardware will be suitable to use cross market in other sectors such as healthcare and manufacturing or to develop new technology,” Brenneis explained.

“We have also now got an internal analytics engine from Cobra that we can use to monitor and develop software and hardware in other segments. We’ll be looking at how this can fit with other M2M offerings.”

Full article in Mobile News issue 578 (December 1, 2014).

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