World News - Sept. 15, 2011

Cars are about to get connected to the internet like never before.

One of the great mobile devices we have is the car.  And cars are about to get connected to the Internet like never before.  Not only will it change how we drive, but it will change the economics of the car business as well.



“Five percent of cars are connected today,” said Glenn Lurie, president of AT&T’s Emerging Devices business. He was speaking of new vehicles, not all cars on the road. “Three to five years from now, 100 percent will be connected. You’ll see diagnostics, calls when the airbag goes off, real-time traffic reports, entertainment in the back seat.”

Mr. Lurie was at CTIA, a wireless industry gathering in San Diego. On Tuesday, General Motors’s Cadillac unit showed off a luxury car platform, called Cue, which will appear in three car models in 2012. In addition to the safety monitoring features, the version shown in the Cadillac XTS featured an 8-inch touch screen that displayed maps, climate controls, weather and text messaging, among other things. It was possible to plug a smartphone in the car in order to have the messages read aloud.

Ford has shown a similar entertainment system, as well as monitoring and information systems for its electric cars, so drivers can find the nearest charging station. AT&T works with Ford, as well as BMW and Nissan, and talks with lots of other manufacturers.

What he sees as much as anything is an explosion of business models that will go with the connected cars. Should the devices cost more up front, or be discounted in exchange for service plans, the way cellphones are? How about engine diagnostics that tell you when to bring the car in, and can even schedule a visit during a down time for the service center, fetching a better price? Should phones and cars work together, through AT&T, to make real-time maps of traffic conditions?

“We have 100 million probes out there” in the form of consumers using mobile phones on the network, Mr. Lurie said. “There will be all kinds of models – put it in the price, give it away for the first year, sell it by the month.” The effect on the car business, he said, will be “a watershed.”

Cars are not the only vehicles getting connected. AT&T’s business solutions group has worked with manufacturers of tractors to enable wireless monitoring of engine data, and with crane makers, to measure use and inform people when goods are loaded. Sometimes the company makes money by shipping the data, sometimes it works as a consultant, figuring out what part of the business should get networked.

Many of these projects have been multimillion-dollar ventures, years in the planning. Mr. Lurie thinks that the next step may be more grassroots, as smaller companies figure out how to repurpose existing devices, like the iPod, to work in new environments.

“What will be more innovative than people realize is the accessories business,” he said. “What kind of cradle does the device fit into in the home, or the office or the car?” The tablet may spend part of its day as a picture frame on an office desk, he said, and later be hooked into the screens of an online multiplayer game. “Apple and Samsung will do things,” he said, “but so will innovative third parties.”

Photo credit: mother nature network

Via New York Times