Light Reading

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. 
SReedy
50%
50%
SReedy,
User Rank: Blogger
7/17/2014 | 5:39:17 PM
Re: Safety First
Joe Speed that works on car tech? You clearly just made that person up...
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.

 
SReedy
50%
50%
SReedy,
User Rank: Blogger
7/17/2014 | 12:17:56 PM
Just another device?
I would have a hard time adding my car as just another device onto my data sharing plans, but US operators like AT&T are banking on customers wanting to do that. It would be nice and simple, but I'd be scared it'd eat up all my data in a minute and end up costing much more than the add-on fee. 
Flash Poll
From The Founder
The Swedish vendor has undergone a significant transformation during the past few years, adjusting to the demands of next-generation communications companies.
LRTV Documentaries
LTE Paves the Way for the 5G Revolution

4|20|15   |   4:20   |   (0) comments


Håkan Andersson, head of 5G product strategy of the Radio Business Unit at Ericsson, discusses the role of LTE, the US and other industry verticals in building a true 5G ecosystem.
LRTV Documentaries
The 3GPP's Road to 5G Standardization

4|17|15   |   4:43   |   (0) comments


Satoshi Nagata, chairman of the 3GPP's TSG-RAN group and a manager at NTT Docomo, explains the standardization process for 5G, as well as the biggest challenges and opportunities.
LRTV Documentaries
AlcaLu CTO Makes the Case for a New 5G Air Interface

4|16|15   |   3:54   |   (0) comments


Michael Peeters, CTO of wireless at Alcatel-Lucent, explains why 5G will require a new air interface to meet its diverse performance targets.
LRTV Documentaries
AlcaLu + Nokia: The New Uber-Vendor

4|15|15   |   2:42   |   (4) comments


Heavy Reading Senior Analyst Gabriel Brown discusses the technological and competitive opportunities and challenges if a merger between Alcatel-Lucent and Nokia comes to pass.
LRTV Huawei Video Resource Center
Huawei's Data Center Power Play

4|15|15   |   6:22   |   (0) comments


Huawei has developed industry-leading energy efficiency capabilities for its indoor and outdoor data center solutions, explains Dr. Fang Liangzhou, vice president of Huawei's Network Energy product Line.
LRTV Huawei Video Resource Center
Huawei’s Routers, Switches Get the Green Mark

4|15|15   |   2:02   |   (0) comments


TUV Rheinland's Frank Dudley explains how Huawei's routers and switches have been successfully tested by energy efficiency experts and have gained Green Mark Certification.
LRTV Documentaries
A Finn, a Frenchman & a Guy From New Jersey Walk Into a Merger...

4|15|15   |   3:17   |   (0) comments


Stop us if you've heard this one before... Light Reading CEO Founder & CEO Steve Saunders weighs in on the technical and cultural implications of a Nokia and Alcatel-Lucent merger.
LRTV Huawei Video Resource Center
Accounting for Better Solutions

4|10|15   |   02:31   |   (1) comment


Murad Yousuf, CTO at Saudi Arabia's Ministry of Finance (Dept. of Zakat & Income Tax), talks about the benefits of deploying router technology from Huawei.
LRTV Huawei Video Resource Center
What's in Store for Huawei & DataCore?

4|10|15   |   05:44   |   (0) comments


At the CeBIT trade show in Hannover, Germany, George Teixeira, CEO of software-defined storage (SDS) specialist DataCore Software, explains why he has just signed a partnership agreement with Huawei Technologies.
LRTV Huawei Video Resource Center
Du Puts Its Faith in Huawei's Routers

4|9|15   |   3:42   |   (0) comments


Adnan Masood, director of Enterprise MS Solutions Marketing at du, the United Arab Emirates (UAE) operator also known as Emirates Integrated Telecommunications Company, explains why his company chose to use Huawei's multifunctional AR routers as part of its managed enterprise services.
LRTV Huawei Video Resource Center
Huawei Gets Active in the Data Center

4|9|15   |   3:17   |   (0) comments


With enterprise users looking to maximize the use of their data center assets, Huawei’s Chief Architect & Technical Director of IT Data Center Solutions, Bruce Su, explains how the company's six-layer active-active data center solution is eradicating the need to deploy passive, redundant data center assets.
LRTV Huawei Video Resource Center
Blue Consult & Huawei for a Better Solution

4|8|15   |   4:01   |   (0) comments


Martin Rott, CEO, and Marc Metzler, head of sales virtualization, from Germany's Blue Consult discuss their collaboration with Huawei and TrendMicro to develop a secure, scalable IT platform that can meet the needs of the most demanding enterprise users.
Upcoming Live Events
May 5, 2015, Hyatt McCormick Place, Chicago, IL
May 6, 2015, Georgia World Congress, Atlanta, GA
May 12, 2015, Grand Hyatt, Denver, CO
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 8, 2015, Chicago, IL
June 9-10, 2015, Chicago, IL
June 9, 2015, Chicago, IL
June 10, 2015, Chicago, IL
September 29-30, 2015, The Westin Grand Müchen, Munich, Germany
November 11-12, 2015, The Westin Peachtree Plaza, Atlanta, GA
All Upcoming Live Events
Infographics
Network Instruments, a JDSU division, shares results from its 2015 State of the Network, a global survey on security.
Hot Topics
Verizon Scores New OTT Content Deals
Mari Silbey, Independent Technology Editor, 4/16/2015
What if the Comcast Merger Fails?
Mari Silbey, Independent Technology Editor, 4/20/2015
Nokia & Alcatel-Lucent: What's Going On?
Ray Le Maistre, Editor-in-chief, 4/15/2015
Nokia + AlcaLu: What the Analysts Say
Ray Le Maistre, Editor-in-chief, 4/14/2015
Huawei P8 Launch: Cue Applause!
Ray Le Maistre, Editor-in-chief, 4/16/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Data Center Interconnect, or DCI, is one of the hottest sectors in telecom currently. Since coming back to Light Reading last year, prodigal-son style, I've ...
LR CEO and Founder Steve Saunders sits down with the head of Qosmos to talk about the changing state of the art in deep packet inspection technology, including its role in SDN and NFV architectures.