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Insurance Telematics Europe 2014

06/05/2014 - 07/05/2014, Novotel London West, UK

Telematics, Insurers and the Consumer Collide: Harness ‘Big Data’ to Create Product Differentiation, Engage & Empower the End-User

4G LTE and the future of the connected car, part II

The coming of 4G LTE marks a radical leap forward for in-car connectivity, one that is expected to bring benefits to both manufacturers and consumers. Still, not everyone is filled with unqualified enthusiasm. Siegfried Mortkowitz reports in the second of a two-part series.

A building block for the autonomous car

It is hard to imagine that a self-driven car could function at all without the low-latency connectivity necessary for the constant exchange of real-time data that enables car-to-car and car-to-infrastructure communication.

Strategy Analytics’ Roger Lanctot says that 4G LTE opens up the possibility of proximity communication with nearby devices.

In the short term, that makes it possible for drivers to pick up information about road conditions and share content with other drivers. In the long term, he says, LTE enables the development of vehicle-to-vehicle communication, which will immediately improve road safety and ultimately contribute to the development of the autonomous car.

UIEvolution’s Christopher Ruff agrees. “The car being connected to the Cloud is the foundation of the autonomous car,” he says. “Continually updating the software is another need for having the autonomous car.”

One of the functions of the Cloud platform being developed by IBM and Continental is to store and process  real-time driving data generated by in-vehicle sensors. Given the amount of data available, this would be impossible without 4G LTE connectivity.

(For part one of the series, see 4G LTE and the future of the connected car, part I.)

Still, who pays?

Once the technology is in wide use, one more issue will need to be resolved: Who pays for the car being constantly connected to the Cloud?

Gareth Owen, principal analyst at ABI Research, says that there cannot be unlimited access to the Internet. “The OEM must be able to limit the amount of Internet connectivity in the car unless the customer is prepared to pay extra for it,” he says. “You can’t connect to YouTube videos 24 hours a day.”

One model may be the deal BMW made with China Unicom for its ConnectedDrive service, which includes accessing news reports, social network blogging and audio streaming.

A three-year ConnectedDrive subscription is included in the price of the car. Beyond that, BMW agreed on a “mixed model communication tariff” with China Unicom, where BMW purchases, for a fixed fee, a certain amount of air time from the wireless provider and pays extra if car owners exceed this amount.

However, this is limited to ConnectedDrive services and does not include unlimited web surfing or video streaming. Or the customer could add the car to his existing wireless plan.

According to Acker, adding in-car infotainment to the consumer’s existing data plan “will happen in a few years.” But Lanctot has reservations. “I personally think that it’s a little silly because the purpose of an embedded modem is for the OEM to get data,” he says. “In a wireless plan, you need a SIM card to divide the information for the car-maker and the consumer. It confuses the issue.”

Ruff suggests that customers may be inclined to exchange private data from the car to subsidize the connection. “Why not sacrifice privacy to get lower rates?” he says. “People will give up data to save money. And today’s Facebook generation will probably not care so much about privacy. They see the world differently.”

4G all the way

Although these and other problems need to be resolved before 4G LTE becomes ubiquitous, it is just a matter of a few years on both sides of the Atlantic, most experts agree. “LTE is a clear advantage in the automotive industry,” says Lars Thyroff, vice president, automotive, Gemalto. “It is becoming more and more a must-have. Fast Internet access will be mandatory in connected cars in the future.”

Harman’s Robert Acker agrees. “The fact of always being connected will be pervasive,” he says. ”Today, to take the data from the Cloud via a cellphone is still a bit complicated for the consumer. With an embedded 4G modem, you have a much more seamless connection with the Cloud. The consumer doesn’t want to wait. It has to be automatic.”

IHS Automotive forecasts that the number of LTE-connected cars will reach 1.2 million in 2015 and then jump to 16 million in 2017. German luxury car makers appear poised to lead the way.

Audi became the first OEM to offer an embedded LTE infotainment system when it provided the option in its S3 Sportback in July and in its A3 line in November. Audi plans to offer its LTE-equipped A3 in the United States in early 2014.

BMW is offering an LTE hotspot module in all its cars in Europe. And General Motors, for its part, has announced that it would make AT&T-provided LTE available as a standard service in its cars in 2015.

Once 4G LTE gets established, it is bound to be around for some time, Ruff says, despite the fact that a number of major industry players, including Ericsson and Huawei, are already investigating 5G, which promises download speeds as fast as 20 gigabits per second and latency below one millisecond. “LTE is going to be a 10- to 12-year technology,” Ruff says.

Siegfried Mortkowitz is a regular contributor to TU.

For all the latest telematics trends, check out Content and Apps for Automotive USA 2013 on Dec. 11-12 in San Francisco, Consumer Telematics Show 2014 on Jan. 6 in Las Vegas, Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, and V2X and Auto Safety USA 2014 on July 8-9 in Novi, Michigan.

For exclusive telematics business analysis and insight, check out TU’s reports: Telematics Connectivity Strategies Report 2013The Automotive HMI Report 2013Insurance Telematics Report 2013 and Fleet & Asset Management Report 2012.

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Insurance Telematics Europe 2014

06/05/2014 - 07/05/2014, Novotel London West, UK

Telematics, Insurers and the Consumer Collide: Harness ‘Big Data’ to Create Product Differentiation, Engage & Empower the End-User