MEETING DEBRIEF: CONNECTED CAR

Author: Derek Kerton, Managing Partner of the Kerton Group and Chairman of the Telecom Council

There can be no doubt that the common ground between telecom and automobiles is prime real estate. On Friday, April 10, the Telecom Council paired with the separate Autotech Council to discuss their mutual interest in the connected car, and community interest was so high that we had to move the meeting from Nvidia’s facility to a rented hall that could accommodate the over 300 registrations. Registration was up 50% over a similar meeting a year ago.

150410-ConnectedCar1There were a number of cars on display, including classics and a telematics-equipped truck from Spireon. The Spireon truck was connected to a variety of vertical-enterprise apps. We were also fortunate to have over a dozen demo tables from companies ranging from Litmus Automation to Nvidia. As usual, the demo tables proved to be great conversation starters during the full 1.5 hours of breaks and breakfast before the start of the meeting.

150410-ConnectedCar2Our meeting kicked off with a conversation between Council Chair Derek Kerton, and Thomas Neubert, VP at Deutsche Telekom, and Aamir Ahmed, Marketing Manager of Global UConnect at Fiat Chrysler Automobiles (FCA). The two speakers represented the two kinds of 800lb gorillas in the connected car space, and they discussed where each saw opportunities in the connected car space. Both companies provide solutions to the aftermarket through OBDII solutions, but the automakers will seek to “own” the consumer experience in the car console, even if partnered with Apple or Google. For their part, carriers will treat the new car market as a B2B opportunity, selling connectivity solutions to carmakers. According to Neubert, the objective is to sell the carmakers smart network services, with QoS, security, and low-latency built-in. Ahmed spoke to the need to put the consumer at the center of car experience planning, and also discussed how FCA approached it’s different geographies and brands (ex: Ferrari, Maserati).

In addressing the issue of how cars will be connected (2G, 3G, 4G, Wi-Fi, or otherwise), the general consensus of the speakers and commenters from the day was that there would be multiple connections in each car, including the phone in tethering, and reverse tethering. But there was general agreement that some services (ex: remote unlock) simply could not work without a in-built radio in the car, and as such, a basic level of connectivity will be table stakes in ALL cars at some point in the near future. There may be an upsell to a higher speed connection, or a higher level of connected services, or the user may bring in their own phone as a gateway to faster internet services. Our panel addressed these questions specifically, and also addressed the question of “What is your favorite connected car service?”. Notable answers included safety, remote control of car functions from smartphone, real time traffic and nav, and car performance monitoring and maintenance systems.

150410-ConnectedCar3The meeting closed in true Telecom and Autotech Council fashion, with a great round of a dozen rapid fire pitches moderated by Alex Farcet, founder of Startupbootcamp, which is expanding from the EU to Silicon Valley. The rapid fires offer speakers a great opportunity to win interest and follow-up from some of the 300 people in the audience that could be potential partners, investors, or customers — with one big caveat: they only have 5 minutes to make their pitch. Our speakers did a great job getting the message out, and introducing themselves to the crowd, as was proven by the crowds gathering around them after the session.

So, in summary, what did we learn? Carmakers fully intend to own the in-car experience, even when partnering with Apple or Google. They are seeking global connectivity solutions, but currently working on a region by region basis with carriers. Regulations affect how each geographic region will be connected. Multiple radios are expected in every new car, and different connectivity service levels will be offered. Pricing models may follow a Sirius XM example of “Free for X months, then paid”, or a “Free basic services for many years, but up-sell to more elaborate connectivity services”, and will vary a lot depending on luxury-level of car, region, and more. The existing fleet of 200 million cars worldwide can be connected via OBDII, but market penetration will be lower in this group. Connectivity is an essential part of the autonomous car, but NOT required, as automakers cannot wait for Vehicle-to-vehicle or vehicle-to-infrastructure solutions to be in place before automating their cars. They will make independently autonomous self-driving cars, and add in V2V and V2I solutions as those make sense, and reach critical mass in each region. Governments or fleet long-haul trucks will be the ones to push forward the V2V and V2I standards.

 

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