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AT&T Ups the Stakes in Connected Cars

Carol Wilson
1/7/2014
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AT&T's renewed push into the connected car market is likely the beginning of major competition among wireless operators in that space, in the US and elsewhere. With four significant announcements this week, including its new AT&T Drive platform, the wireless giant showed it wants to be much more than just a carrier handling additional traffic to connected cars. (See AT&T Beefs Up Connected Car Efforts .)

AT&T Inc. (NYSE: T) also announced its AT&T Drive Studio, an Atlanta-based lab in which automakers can try out different connected car options, as well as significant partnerships with Ericsson AB (Nasdaq: ERIC), Amdocs Ltd. (NYSE: DOX), Accenture , Synchronoss Technologies Inc. (Nasdaq: SNCR), and VoiceBox Technologies , and two new connected car customers in Audi, a former T-Mobile customer, and Tesla. (See Audi Taps AT&T for In-Car LTE and AT&T, Tesla Tie Connected Car Knot.)

AT&T's efforts are a shot across the bows of its US competitors, particularly Verizon Communications Inc. (NYSE: VZ), but also global wireless providers. (See Verizon Chasing Insurance Telematics Gold.)

The AT&T Drive Platform intends to leverage the 4G LTE data capabilities in ways unique to the car environment, and to support apps and services that are controllable by natural speech to enhance safety and reduce distractions, says Chris Penrose, senior vice president, emerging devices, AT&T Mobility. AT&T is not only setting itself up to work with automakers to develop these new apps but also building the business case and developing specific billing functions to support this market.

"We basically have pulled together all the different aspects of connected cars to create a truly global platform and targeted at each OEM to provide whatever they need around the world," Penrose says. "They can see it come to life in the Drive Studio, which is a lab that is 100% dedicated to this market."

Anyone in the auto ecosystem -- manufacturers, dealers, insurance companies, and, of course, consumers -- is a potential target market for AT&T Drive. But it starts with the manufacturers, who can use the platform to enhance the features of their connected cars, develop their own app stores, track the performance of the cars, and know when maintenance is required and deliver in-car services.

AT&T is working with Ericsson's Connected Vehicle Cloud, providing connectivity to the services it offers, including auto repair records and appointments, in-vehicle information and entertainment offerings, and WiFi hotspot capabilities. The Voicebox partnership is enabling natural speech control of car functions -- an important aspect in ensuring that connected cars are safer and not just a bundle of driver distractions, says Penrose.

"We want to take care in order to be safe and secure, to keep the driver's eyes on the road," he says. "That's why we are using not only onboard speech to drive different components in the car, but also cloud-based services so any app can be speech-enabled and you can get to what you want to get to using your voice."

That can ultimately include customized apps based on voice recognition, Penrose says.

With Amdocs, AT&T is developing billing solutions that allow multiple parties to pay separately for in-car services, with the auto manufacturers or dealers footing the bill for vehicle performance and status information and consumers paying either directly via a separate bill or as part of their AT&T bill for the services they use.

Insurance companies have the option to offer usage-based billing or other services as well via AT&T Drive, Penrose says.

The connected car market has been a bit slow to take off, in part because of the complexity of delivering and billing for services and the fact that consumers carrying smartphones are always convinced their cars require separate services.

Working with Synchronoss, AT&T is developing web portals to make service activation and customization easier for auto dealers, Penrose says. The revenue opportunities are numerous for AT&T, from the wholesale provision of wireless to car companies such as GM and Audi, to retail opportunities for consumers on either an ongoing basis or even on-demand. The on-demand opportunities include creating WiFi hotspots for specific trips, running apps in the car, or doing specific downloads such as AT&T does today with Kindle, where the service is associated with the book download.

— Carol Wilson, Editor-at-Large, Light Reading

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Carol Wilson
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Carol Wilson,
User Rank: Blogger
1/8/2014 | 3:14:06 PM
Re: T-Mobile not out of the Audi mix
They are definitely moving very aggressively in pursuing car manufacturers - it will be interesting to see how other wireless operators respond. 
DanJones
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DanJones,
User Rank: Blogger
1/8/2014 | 1:37:26 PM
Re: T-Mobile not out of the Audi mix
AT&T executives said to expect a LOT more Connected Car/AT&T Drive deals over the course of this year. 
Carol Wilson
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Carol Wilson,
User Rank: Blogger
1/8/2014 | 9:52:09 AM
T-Mobile not out of the Audi mix
Quick update from T-Mobile and Audi - T-Mobile is not a "former" provider to Audi, and still is the exclusive wireless connectivity provider for Audi A8, A6, A7, A4, A5, Q5, and Q7 models. These were the only models equipped with Audi connect at the time. The A3 is just now coming to market with Audi connect for the first time and that is being supplied by AT&T. 

Also of note: Audi Connect is the second biggest reason customers cite for choosing an Audi, according to the carmaker. 

Wow, that's pretty amazing if people are starting to choose cars in part because of their connectivity. 

 
Ray@LR
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Ray@LR,
User Rank: Blogger
1/8/2014 | 7:35:16 AM
Interesting and impressive support line-up
That's a robust set of supporting techs AT&T has amassed -- this will be a real interesting test for the combination of cloud-based apps, 4G and differentiated billing options.

What appears to be smart about this is that it will be flexible and have the ability to adjust as users discover their preferences and trends emerge. Then we'll see if AT&T proceses are up to it - customer care is going to be ultra-critical here, esp as the car makers will not want their brands tainted by poor connected car services. 
DanJones
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DanJones,
User Rank: Blogger
1/7/2014 | 11:32:29 PM
Re: Safety concerns
AT&T's Glenn Lurie thinks diverless cars are "a nice research project" but a long way from prime-time, asked him about it tonight.
DOShea
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DOShea,
User Rank: Blogger
1/7/2014 | 9:11:42 PM
Re: Safety concerns
Any operators pushing hard in the connected car market might want to also cheer on any progress toward driverless cars. Though that also would put the big wireless carriers in the position of hoping the best for Google.
Carol Wilson
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Carol Wilson,
User Rank: Blogger
1/7/2014 | 12:45:37 PM
Re: Verizon's driving too
I think Verizon and AT&T are going to duke it out in this connected car space big time  -- there are multiple revenue streams at stake here. 

Alan, AT&T's whole approach is to make any car function controllable by voice, including the radio and even things like the heater. They believe they can actually make connected cars safer by eliminating instances where the driver has to take his or her hands off the wheel. 

For example, you could send a text via voice, which would be safer than trying to tap out that message that you just can't wait to send. 

Of course, if the driver uses his in-car connectivity to watch a movie while driving or get distracted by something else then yes, it would be more dangerous. Unfortunately, as we've learned from texting, once you give humans the capability to do something, they will do it as they choose, even when it's proven to be very dangerous.
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
1/7/2014 | 12:42:08 PM
Re: Safety concerns
AT&T's no texting and driving campaign is really big. I see it a lot (and 100% supoport it!!).

I think they all emphasis safety first and play up those features that make communications safer -- sort of the "we know you're going to do it, so here's how to do it safer" approach to the problem. It's a fine line between safety-first and infotainment though.
Sarah Thomas
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Sarah Thomas,
User Rank: Blogger
1/7/2014 | 12:40:38 PM
Verizon's driving too
I think I got around 12 emails about AT&T's connected car efforts -- clearly an important, partnership-heavy focus for them. Verizon's CEO Lowell McAdam also identified telematics as the most important M2M vertical at today's Citi conference. He said it's ramping nicely for Verizon and that its Hughes acquisition has performed well for it. It just launched with Mercedes in China, but that's the only specifics he offered up.
albreznick
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albreznick,
User Rank: Blogger
1/7/2014 | 12:36:51 PM
Safety concerns
I wonder how all this connected car stuff jibes with the increeasing safety concerns about drivers getting distracted by cell calls. Even if the calls are conducted hands-free, drivers are clearly distracted. Do AT&T, the automakers and the other players have anhything to say about that?  
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