Event

On 25 February 2013, General Motors (GM) announced a global strategy to equip its cars and trucks with embedded 4G LTE mobile broadband. Most of GM’s 2015 models in the United States and Canada will be offered with LTE on AT&T’s network, and the automaker plans to announce more LTE carrier relationships in global markets in the coming months.

Analysis

GM’s global commitment to deploying embedded LTE in its vehicles is an important step in the evolution of connected-vehicle offerings that will raise consumer expectations of the connected vehicle experience and force other automakers to develop LTE deployment plans. Premium brands like Audi and BMW have also announced LTE plans, but GM is the first volume manufacturer that plans to roll out the technology globally. The use of LTE technology will enable GM and other automakers to create a foundation for future connected-vehicle innovations centered on data-rich applications and services like:

• Streaming video via onboard cameras that can provide first responders with critical insights after an accident
• Seamless off-board infotainment experiences with shorter download times for cloud-based media
• Improved, less distracting communication enabled by the use of voice over IP instead of cellular connections

GM’s announcement highlights the importance of AT&T as a strategic collaboration partner in jointly exploring new LTE-based automotive value propositions and motivating application developers to focus on the connected vehicle, given competition from other, more pervasive device platforms, such as smartphones. GM will simultaneously support high-bandwidth connectivity via smartphones, and plans to pursue creative business models with AT&T to drive broad adoption of its new 4G LTE platform.

Partnerships like this must, however, also offer flexible, attractive pricing for data plans, to convince consumers to use the service instead of their smartphones. A recent Gartner survey shows that 31% of U.S. vehicle owners prefer in-vehicle Internet enabled via smartphone data plans vs. 21% who prefer an embedded vehicle data plan (see "U.S. Consumer Vehicle ICT Study: Web-Based Features Continue to Rise" ). Automakers and carriers must give customers the choice of adding vehicles as additional devices on their existing smartphone data plans. Customers should also be allowed to add extra wireless data volumes on a monthly or as-needed basis (for example, to support higher usage during a family trip).

Automakers:

• Seek carrier partnerships that offer attractive pricing options to increase demand for your LTE offerings. Offer multiple pricing and solution choices to serve the full spectrum from basic connectivity (for example, simple traffic and weather updates via tethered smartphones) to superconnectivity (for example, unlimited media downloads via the embedded head unit). Develop joint marketing and sales initiatives with carriers and device manufacturers that will promote all products as packaged solution offerings (for example, a new smartphone and a vehicle-specific data plan extension offered by the dealer during a new-vehicle sale).
• Assess carriers' capabilities to support LTE coverage and roaming agreements in multicountry regions such as Europe. Explore a modular infotainment hardware approach that makes it possible to swap individual modules based on the predominant wireless technology used in a specific region.
• Offset some of the engineering and procurement expenses of LTE development, and consider subsidizing some of the data plan charges, in return for the ability to gather critical diagnostic data that can be beneficial to your engineering and customer service departments.

Some documents may not be available as part of your current Gartner subscription.

• "Innovation Insight: The Connected Vehicle Will Dominate Automotive and Mobility Innovations" — As the connected vehicle becomes the ultimate mobile device, new value propositions will emerge and business models will be disrupted. By Thilo Koslowski
• "Verizon to Acquire Hughes Telematics to Boost Vehicle ICT Positioning" — This acquisition complements both carriers' machine-to-machine and mobile strategies in telematics, but some automakers will prefer a multisource partnership and technology strategy. By Thilo Koslowski