Which road will the connected car take?

I remember the first time, seven or eight years ago, when I got into a car that had Bluetooth connectivity and was able to pair a handset with the car's audio system, and then call home with a click on the steering wheel. At the time, it was one of the coolest technology leaps I had seen. A lot has changed since then in terms of embedding wireless technology into the car.

There are two main models when it comes to connected cars--tethering and embedded--though they are not mutually exclusive. Users can either take their smartphone into the car and transfer their digital content between the phone and the car or access and transmit information from the car via embedded modules. Each model presents its own opportunities and challenges

There have been major advances on the tethering front over the past few years, and the companies at the forefront of melding the mobile and car experiences are continuing to bring that experience to more and more cars. For example, Ford Motor Co. recently said it will bring its Sync AppLink offering 10 different 2012 models. AppLink is Ford's service that connects users' smartphones to their vehicles, and is available to mobile app developers via Ford APIs.

A key challenge for this model is actually consumer awareness. Glenn Lurie, the president of AT&T's (NYSE:T) emerging devices business said that less than 20 percent of users who have Bluetooth on their phones, for example, actually wind up using that functionality when they could in their car. He said consumers either don't know all that they can do with their phone in cars or think it's too difficult to set up. "That's another big hurdle we as an ecosystem have to get over," he said.  

On the embedded side, it appears there is much more momentum, especially as more wireless content becomes available to users in their cars and more carriers move to LTE. The watchword in this space is "head-unit," or where consumers interact with digital content in the front seat. The kind of applications enabled by embedded wireless is evolving from standard apps like diagnostics and safety (E911 service when the airbag deploys, for example) to customized mapping and location and entertainment services.
One key challenges for automakers and wireless module suppliers is still automakers' development cycles, which typically last three to five years, but need to accelerate to keep up with changes in mobile technology. "Now they're thinking, 'What are refreshes I can make within three-year cycles?'" said Danny Bowman, the president, of the integrated solutions group at Sprint Nextel (NYSE:S), referring to carmakers. "‘If I put in the right infrastructure with my wireless capability, I can now do things over the air.'"

But as the amount of data transmitted wirelessly to and from a car's dashboard increases, I worry about what this will mean for driver safety. Carriers contend that connected car solutions can actually make drivers less distracted. For example, a sensor can let a car know when it is getting to close to another car, or real-time traffic rerouting can divert cars away from congested roadways.

The ability to develop context-aware solutions that can deliver valuable information to drivers while also providing kids in the backseat with wireless-enabled entertainment is the goldilocks solution for carriers, carmakers and embedded module providers. But they will all have to work in concert to make that a reality, and make it something that consumers want and will pay for.

We will be exploring these issues and more during FierceWireless' virtual event, "Embedded Wireless Devices" tomorrow. I'll be moderating a panel specifically on the connected car at 11:15 a.m. EDT.  To view the entire agenda and register (attendance is free!), click here.--Phil