Car Connectivity’s Future Seen Divided Between Embedded Modems, Smartphones

General Motors’ announcement in February that it would deliver a majority of vehicles beginning mid-2014 with embedded 4G AT&T connectivity broadened the visibility of embedded solutions beyond the luxury vehicle market, said panelists at the Connected Car Conference in New York. Geoff Snyder, director of automotive business development for Pandora, called GM’s decision an “exciting test bed for mass-market availability of embedded connectivity in the car.”

Pandora stands to gain from embedded solutions in the car market, a revenue opportunity the company is aggressively targeting as it ramps up advertising sales staff in a push toward boosting its listener numbers and generating more ad-based revenue. Pandora isn’t offered as a service on embedded car connectivity solutions, Snyder said. The company instead has amassed more than 200 million registered users largely from its core mobile listener base and has its eyes set on the “drive time” space where 47 percent of listening takes place, it has said.

TuneIn Radio is also eying the revenue potential of the car market, said Carl Rohling, vice president-business development. He said TuneIn, which gives users access to radio stations from the U.S. and other countries, has access to “a lot of valuable metadata” from user registration information including location and the type of device a listener uses to access music. That data is valuable for ad targeting, Rohling said, adding that the company has the ability to insert a local ad for a New York company for a TuneIn user listening to a Los Angeles radio station while driving in Manhattan. TuneIn can serve a local ad “that’s more relevant than a station in L.A.,” he said. While TuneIn is capable of doing that now, the technology isn’t embedded yet “in all the different locations,” he said.

Snyder concurred that there’s a “huge opportunity” in local ad sales for Internet radio companies. Pandora isn’t delivering ads to vehicles, but Snyder outlined a future opportunity where the company could use “integrated solutions” to target someone driving a high-end vehicle. The company isn’t leveraging any GPS or location-based data other than ZIP codes recorded at registration, he said. There is a “premium opportunity” from integration with embedded vehicle modems, said Snyder. “We don’t want people picking up their phones and using the Pandora app.”

OEM supplier Aha Radio, part of Harman, touted its smartphone-based solution for connectivity that connects a user to an Aha-enabled vehicle’s sound system through iOS or Android apps. Chia-Lin Simmons, vice president-marketing & content, linked smartphone users’ desire to be connected at all times to a need to recharge their devices during drive time. For smartphone users, the concept of coupling the phone to the vehicle “is natural,” she said. Users will connect their vehicles through car chargers whether they're using the content via smartphone apps or not, she said. The debate about whether drivers will be connected to music via embedded modems or their phones “is going to go away because pretty much this is the trend today and most people don’t have a phone that they don’t need to charge in a car anymore,” she said.

Roger Lanctot, Strategy Analytics associate director-global automotive practice, cited additional uses of the smartphone that make it a useful connectivity device in the vehicle. Such uses include the ability to update map information on the fly; communicate in an emergency situation; provide a user’s customized set of apps, content, email and contacts; and handle payment of tolls, fuel and parking via near-field communication payments.

But driver distraction is key to the success of the smartphone as the connectivity device in the vehicle, panelists noted. “The user experience has to be so deeply integrated that it’s as easy to use as a radio,” said Simmons of Aha Radio. That extends to integration with social media apps, as well, she said. That means re-tweets on Twitter and Facebook check-ins need to be one-button operations, she said.

BMW has made social media integration part of its BMW ConnectedDrive offering but in abridged versions, said Eric Sargent, product manager, BMW Connected Drive & Technology. Drivers can only see a “very limited amount of text, he said. They can also use text-to-speech to listen to social media updates rather than having to look at a screen, all part of integrating communications in the car so that “they're not distracting,” he said. Beginning in 2014, BMW has said, its iDrive interface will integrate with smartphone voice-control interfaces.

An issue that’s challenging the infotainment industry is the control car makers have over the total process and the resulting lack of a standard for connectivity in telematics, panelists said. Service providers want to bring their products to vehicles, but there’s a lot of fragmentation in technology approaches, said Rohling of TuneIn Radio. OEMs consider their telematics solutions “as personal to them as their engines are,” he said. OEMs want to customize solutions, choose the services, control the interface and decide whether connectivity will be embedded or integrated with a smartphone, he said.

TuneIn has worked with Livio as a bridge to GM vehicles via smartphone, and it has worked with Tesla on integrating its service into that embedded platform without the use of a smartphone, said Rohling. Neither route provides a standard solution that the company can apply to other OEMs, because “when it’s time to engage with a new OEM, they have a different approach to way they believe services should be delivered in a car,” he said. From TuneIn’s perspective, “people want to get into their car and use voice navigation and select an artist, station, DJ or talent,” he said. TuneIn wants to be the portal that connects drivers to content “without having to worry about hitting an AM or FM button or opening a bunch of different apps,” he said.