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