with Glenn Lurie, president of emerging enterprises and partnerships at AT&T Mobility
Lurie (Image source: AT&T)
The connected car concept has gained more traction worldwide in recent months. Most, if not all, new cars will have some form of connectivity by 2025, due largely to the rapid growth of embedded mobile technology, according to a report issued by the GSMA and conducted by research firm SBD. Naturally, mobile operators are angling to get in on the action, and this past February, AT&T Mobility (NYSE:T) scored a coup by replacing Verizon Wireless (NYSE:VZ) as the communications service provider for General Motors' OnStar service. In addition, on July 17, AT&T announced an agreement with SiriusXM to provide mobile connectivity supporting security and services for Nissan vehicles in North America. FierceBroadbandWireless Editor Tammy Parker recently chatted with Glenn Lurie, president of emerging enterprises and partnerships at AT&T Mobility, about the connected car market and why the automobile is becoming just another device on the wireless network. Following is an edited and condensed version of that interview.
FierceBroadbandWireless: AT&T will be providing LTE connectivity for GM's OnStar service. Where are you in the process of launching OnStar service for model year 2015 cars that will come out in 2014?
Lurie: We are in the process of doing a whole bunch of moving parts when you think about what GM has announced and what we have announced as partners. Putting LTE in all of their vehicles is a tremendous move by GM, and we're obviously very excited to be a partner of theirs as well as excited about what they want to bring to the car, with OnStar being one piece of that when we think of safety and security in the front seat. When you have a pipe like an LTE pipe that is as robust as 10 to 12 Mbps there is so much more you can do on the car, and the reality is the car is going to become a very different place in the near future. We are talking about 4G hotspots, infotainment, applications specifically for the car and the opportunity to add a lot of safety aspects to the car as well.
FierceBroadbandWireless: What new in-car services will be offered by OnStar and/or AT&T once it is connected to AT&T's LTE network?
Lurie: You're going to have a bifurcated model in the car. This has been said by both GM and us. I don't want to specifically talk GM: Let's just talk in general about what we're going to see from many automotive players. You're going to have a wholesale model in the car. Simply put, the current safety and security model that you're seeing in most vehicles is that of wholesale. We're selling bits and bytes to these [automotive] OEMs. They're packaging that up and offering a safety and security option for the car, whether it's GM OnStar, BMW or others. That is what is happening in the vehicle today, and you're going to see more and more of it.
When you add LTE to the car, that allows you to do so many more things. It allows you to do almost anything you want, whether that is real-time traffic, real-time diagnostics, ability to add some very robust car to car communications, the ability to add very robust natural voice opportunities in the front seat. It allows you to do a lot in the back seat, whether that is adding that 4G hotspot to bring real-time infotainment to screens in the back. It also allows you to do some very, very cool things with bringing the smartphone and other devices into the car, making that experience much more simplistic... Reality is once you have the pipe in the car, that broadband connection, it's a kind of, "If you build it, they will come." We just don't know all of the things that may happen once you have that.
FierceBroadbandWireless: You mentioned the bifurcated business model and it appears there are a lot of people who going to be able to get their fingers into the pie once you have the broadband pipe.
Lurie: I think that's correct. I would say it this way: We have to deliver a value proposition customers are willing to pay for. That's first and foremost. Customers will drive this with their wallets. They will make the decision as to where they see the value. That's first. Second, the opportunity in the car for the customer as well as for others in the ecosystem, including us and the OEM, is that the customer wants a 4G hotspot in the car, the customer wants to deliver more infotainment into the car, and they'll have the opportunity to buy a retail plan. That is one opportunity that we'll have.
I've been asked numerous times, "Well, is this just going to be another device that you'll add to a Mobile Share [shared-data] plan like you add a smartphone or you add a tablet." My answer is that we haven't made any definitive announcements. But I think that's a pretty good example of what makes really good sense for that customer to be able to have their car eating out of the same bucket that they have for their smartphone or anything else because we view the car as just another device in your life.
At the same time, regarding the safety and security aspect… I think you'll see the OEMs competing with each other about what they include in the vehicle on safety and security and also what is the definition of safety and security and how many kinds of features and applications do they include.
FierceBroadbandWireless: Do you have any other thoughts, Glenn, which you'd like to share regarding AT&T's connected car efforts?
Lurie: One of the things I'd add--that's really important when you think about this business--is that I would argue this is without question one of the largest growth opportunities in the wireless space. Let me give you some stats. There's 260 million cars on the road today and about 5 percent are connected. And by connected I mean they have an embedded module built into the car. That means you've got 250-odd million cars that are not connected. I do think there are other opportunities--aftermarket opportunities, OBD2 Port opportunities, where we're going to hopefully be able to deliver cars that are already on the road the ability to make them safer, to add these types of services, add emergency services, add real-time traffic and those types of things.
Going forward on the vehicle of the future and some of the deals we've talked about, I really am excited about the opportunity when you start thinking about developers, when you start thinking about innovation in the car. I do believe once you wirelessly enable a vehicle with LTE, just like we've seen with other aspects of our world--whether it be the tablet world or the pre-smartphone world--once you build it, people will start to really innovate around the vehicle.