Driving the business case for the connected car

Sue Marek
Telematics solutions aren't a new phenomenon but they have suddenly become top-of-mind to the industry, as wireless operators turn their focus toward equipping all types of things (cars, healthcare devices, homes) with wireless connectivity. But connected car offerings today are very different from the telematics solutions of the past that primarily focused on safety and security.

Automobile makers currently are very intent upon creating connected cars that allow them to differentiate their vehicles from the competition and offer consumers a bevy of tools, including diagnostic information and entertainment.

But there are challenges. Car buyers haven't shown a lot of willingness to pay for the extra safety tools offered by many of the existing telematics solutions. In fact, in its fourth quarter 2011 earnings, Verizon Wireless (NYSE:VZ) revealed that it lost 490,000 wholesale and other connections in the quarter. The company attributed those losses in part to a decline in telematics customers but refused to provide more specifics on those losses. Nevertheless, analysts and sources in the M2M industry believe that the decrease likely came from customers of General Motors' OnStar service, which uses Verizon's network. These customers were likely no longer active, paying customers and failed to renew the service after its free trial period.

Consumers may not want to pay for safety and security solutions in their cars, but they do seem willing to pay for entertainment or infotainment solutions. Car manufacturer Ford has had success with its Sync voice-command system and upgraded MyFord Touch and MyLincold Touch dashboard control systems that let customers sync their existing smartphones and media players with the car.

And this solution also eliminates the need for a car maker to embed wireless connectivity into the vehicle and risk it becoming outdated in a few years.    

But car-makers aren't the only ones interested in developing a business model for the connected car. Numerous software makers, platform providers and others are taking a strategic look at this area. In fact, if you are planning to attend the Mobile World Congress conference in Barcelona, Spain, next week, expect to hear a lot of buzz about the connected car.   

FierceWireless will be taking an in-depth look at this area at our "Paving the Way to Success for the Connected Car" luncheon Wednesday, Feb. 29 from 12:30 to 2 p.m. at the Hotel Rey Juan Carlos I in Barcelona in conjunction with the Mobile World Congress. Please join me and my guests David Haight, vice president business development for emerging devices at AT&T Mobility; Doug VanDagens, global director for connected services solutions organization at Ford Motor Company; Francesca Forestieri, programme director of mAutomotive Connected Living Programme at the GSMA; and Sebastien Marineau-Mes, senior vice president at QNX Engineering

During this roundtable discussion we will talk about the various business models and strategies for the connected car. Plus we will leave plenty of time for you to ask the participants your questions. Register today for the event. I look forward to seeing you next week in Barcelona. --Sue