Connected Cars Increasing Profit for Automakers and Wireless Carriers

smart-carBuilt-in W-Fi will be a standard feature in many new cars next year. Auto makers and service providers are both profiting from the emerging connected car market. General Motors (GM) is leading the way, and the company expects to generate $350 million in improved profit over the next three years, as a direct result of its OnStar 4G LTE program.

LTE (Long Term Evolution), is a fourth generation wireless communications standard developed by the 3rd Generation Partnership Project (3GPP). It is designed to provide up to ten times the speeds of previous 3G networks for mobile devices. LTE is one of several competing 4G standards that require voice, data, and multimedia streaming at speeds of at least 100 Mbit per second and up to as fast as 1 GBit per second (faster than 3G but slower than 5G).

Speaking at a Bank of America Merrill Lynch conference on Wednesday, GM’s chief financial officer Chuck Stevens called Wi-Fi in vehicles an “untapped, under-appreciated opportunity.” Previously, Verizon provided services for GM’s OnStar program since its launch in 1990, but last January GM announced a new agreement with AT&T to provide connected car technology. Since then, 30 of GM’s 2015 models rolled out across North America with 4G LTE mobile broadband, and all of their 2016 models are expected to be connected. GM and AT&T will also introduce the service in Europe in the near future. AT&T plans to capture at least half of the market share of connected cars in 2015. To reach this goal, the wireless carrier has also partnered with several other automakers to turn cars and trucks into mobile hotspots.

Source: Today Online | Bidness Etc  | Image via Chevrolet