& cplSiteName &

Telefónica: Safety Is Top Connected Car 'App'

Sarah Thomas
7/16/2014
50%
50%

When you think of a connected car, it's likely navigation and infotainment services that come to mind, but safety features are still the top "apps" that drivers want -- and will pay for.

According to Telefónica SA (NYSE: TEF)'s second annual Connected Car industry report, increased safety and early warning systems, followed by smarter navigation and usage-based insurance, are the most popular connected car features. Consumers are starting to ask for them by name, with 71% of drivers in the survey indicating they are interested in using, or are already using, connected car services.

Telefónica says that 80% of consumers expect the connected car of the future to provide the same connected experience they are used to at home, at work, and on the move via their mobile phones -- implying that they do want to go beyond safety features as well.

What they don't necessarily want is to pay incrementally for these types of services. Pavan Mathew, Telefónica's head of connected car, says that, especially in the US, drivers will pay for safety- and security-related services, which could include car diagnostics, geofencing to track the whereabouts of young drivers, and traditional roadside assistance services. But infotainment and media apps are more challenging, especially since the average driver is only in the car for his or her commute in the developed world. (See Finding the Value in Transportation Telematics.)

That said, what consumers will pay for, as well as how they will pay, is still being worked out. Telefónica suggests there are geographical variations as well. It found that 40% of Spanish drivers prefer a one-off payment, while Americans, Germans, and Brits would like to pay for the connectivity itself, with the option to add on additional services. (See AT&T Makes GM Cars a Data Plan Add-On and AT&T Tests Drivers' Desire to Pay for LTE.)

Also, while 60% said they prefer to access connected services through their dashboards, most are still tethering their smartphones for any other type of app or service. Mathew says to expect a lot more activity around embedded connectivity in the next year and beyond, although it will primarily be 3G with 2G fallback, since LTE networks around the globe aren't yet ready for this kind of bandwidth-heavy deployment, and car makers aren't prepared to pay for it. (See MNOs Need to Get in the Driver's Seat.)

Last year, Telefónica used its survey to predict that the number of vehicles with built-in connectivity would increase from 10% in 2013 to 90% by 2020. This meshes with a forecast from Analysys Mason that 90% of new cars will have embedded connectivity by 2024. (See Connected Cars: Tether Today, Embed in 10.)

Telefónica in the driver's seat
The survey results are, of course, good news for Telefónica, which is making a big push into the connected car. Earlier this year it signed an agreement with Tesla to bring connectivity to its Model S car in Europe. The appointment of Mathew, who joined two years ago from General Motors as "head of connected car," shows how serious it is as well. (See Tesla Connects Its Cars in Europe With Telefónica and If These Cars Could Talk.)

Mathew was part of the transition when Telefónica brought its digital spin-off, Telefónica Digital, back in-house earlier this year. At that time, the connected car and machine-to-machine communications became big focuses for the entirety of the operator, and not kept to a separate division. It sees a big uptick in demand for connectivity in cars, even just since last year's survey, and it wants to play an integral role in the value chain. (See Telefónica Walks the Digital Tightrope.)

"Now telematics service and connectivity in certain models are in the top 10 reasons to purchase," Mathew says. "Consumers are asking what kind of connectivity they have when they come in to purchase the vehicle. Consumers have a framework, they understand it, and are looking for it."

— Sarah Reedy, Senior Editor, Light Reading

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
7/18/2014 | 4:14:44 PM
Re: Just another device?
All good applications, but I fear the entertainment apps would be too distracting. 
jasonmeyers
50%
50%
jasonmeyers,
User Rank: Blogger
7/17/2014 | 3:02:11 PM
Re: Just another device?
Mitch - even for safety/security? Or infotainment for passengers? The latter can be a lifesaver on long trips with little kids. 

As for the former, consider if someone you knew (hypothetically) recently was so zoned out driving along that he (or she) ran out of gas on the highway, miles between exits -- and the safest way to get out of that hypothetical predicament was to hit a button on the rearview mirror, talk to a dispatcher and have someone bring him (or her) gas.  

I'm sure that would NEVER happen to anyone. But... what if it did?

 
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
7/17/2014 | 2:11:40 PM
Re: Just another device?
I remain skeptical of the wisdom of most connected car applications. Anything with the potential to distract the driver is a bad idea. 
jasonmeyers
50%
50%
jasonmeyers,
User Rank: Blogger
7/17/2014 | 1:57:57 PM
Safety First
There is a lot more talk about security lately when it comes to connected everything -- cars included, obviously. Joe Speed, the Linux Foundation representative of the AllSeen Alliance I spoke to yesterday, said his group is working on ways to make sure different applications within connected cars are segmented into what he called "virtual spaces" -- to make sure that in-vehicle infotainment applications don't interfere with safety services, for example. I expect we'll see a lot more attention paid to that as things continue to develop.

 
Featured Video
From The Founder
Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
Flash Poll
Upcoming Live Events
March 20-22, 2018, Denver Marriott Tech Center
March 22, 2018, Denver, Colorado | Denver Marriott Tech Center
March 28, 2018, Kansas City Convention Center
April 4, 2018, The Westin Dallas Downtown, Dallas
April 9, 2018, Las Vegas Convention Center
May 14-16, 2018, Austin Convention Center
September 25-27, 2018, Denver, Colorado
October 23, 2018, Georgia World Congress Centre, Atlanta, GA
November 8, 2018, The Montcalm by Marble Arch, London
November 15, 2018, The Westin Times Square, New York
December 4-6, 2018, Lisbon, Portugal
All Upcoming Live Events
Hot Topics
Net Neutrality Moves Are as Futile as Trump's Comb-Over
Iain Morris, News Editor, 1/18/2018
Ericsson Lurches to $1.8B Write-Down
Iain Morris, News Editor, 1/16/2018
Analyst: Verizon's Fixed 5G Is a Loss Leader for Mobile
Dan Jones, Mobile Editor, 1/16/2018
Samsung Plots New 5G Modem – Report
Dan Jones, Mobile Editor, 1/18/2018
Has the 5G Upturn Begun?
Iain Morris, News Editor, 1/19/2018
Animals with Phones
Live Digital Audio

A CSP's digital transformation involves so much more than technology. Crucial – and often most challenging – is the cultural transformation that goes along with it. As Sigma's Chief Technology Officer, Catherine Michel has extensive experience with technology as she leads the company's entire product portfolio and strategy. But she's also no stranger to merging technology and culture, having taken a company — Tribold — from inception to acquisition (by Sigma in 2013), and she continues to advise service providers on how to drive their own transformations. This impressive female leader and vocal advocate for other women in the industry will join Women in Comms for a live radio show to discuss all things digital transformation, including the cultural transformation that goes along with it.

Like Us on Facebook
Twitter Feed