2014-07-25

Co.Labs

Why Automakers Want 4G Inside Cars

Here's what automakers can do when cars have built-in smartphone capabilities.



It’s no secret that cars are trying to replicate the smartphone experience. Touchscreen interfaces are common in today’s cars, dashboard designers take UI tips from iPhones, and automakers want to build apps for cars. And starting this year, large automakers like General Motors are taking the next obvious step and integrating 4G LTE service into their cars. Drivers pay a monthly service fee for in-car 4G that’s separate from their smartphones, and use it for an array of services from movies for kids in the backseat to sophisticated GPS-on-steroids solutions. It’s a win-win for automakers, the dealers who sell the 4G add-ons, and carriers like AT&T. But is it a win for consumers?

Audi, the first major automaker to introduce 4G connectivity, debuted the option in their 2015 A3 car. GM is adding 4G capability to nearly all of their 2015 Buick models, and 4G is also rolling out to Chevrolet and Dodge within the year. While some luxury cars have come with built in 3G in the past, there are two major game changers here: Both GM and Audi are aggressively targeting middle-market consumers, and 4G viewers tend to consume a whole lot of bandwidth-intensive video content which generates expensive data fees.

Photo by Noah Berger for Buick

Phil Abram, GM’s chief infotainment officer (a job title which does actually exist) is the man responsible for rolling out interactive content and delivery systems for Buick, Chevrolet, Cadillac, and other brands. When Co.Labs held a video chat with Abram earlier this month, he said that the 2015 Buick LeSabre, the first GM model with 4G, debuted in June and the company will add 4G to 30 more models by the end of the year. New car buyers would be given a 3 gigabyte trial and data plans would be set up by AT&T. The cheapest $5 plan offers 250 megabytes usable in a 24-hour period; monthly plans range from $5 for 200 megabytes to $50 for 5 gigabytes a month. These fees piggyback on top of existing OnStar telematics packages, which start at $20 a month.

"We looked closely at other device pricing plans," Abram added. "The use case of cars is different than phones."

In promotional materials, Audi and GM both emphasize 4G LTE service as a mechanism for users to get in-car entertainment, rather than for navigation or safety monitoring. Buick boasts they can "Keep everyone happy with streamed movies, music, and games," while Audi emphasizes "faster downloads and high-definition video streaming for up to eight devices used by passengers over the in-vehicle Wi-Fi hotspot."

Smartphone and car convergence has been happening for quite some time, and in-car 4G allows automakers to solve the vexing customer issue of answering demand to integrate smartphones without sacrificing safety or usability, while simultaneously pushing a lucrative car option to market. Audi is offering drivers their a new and data-intensive navigation system, which feeds the dashboard with information on nearby gas stations, restaurants, and all sorts of Google Earth overlays. GM, meanwhile, is revamping their previously 2G Onstar system to take advantage of the new data possibilities.

And then, naturally, there are the auto dealerships. In-car 4G hotspots are potentially lucrative business—especially when there’s a $50 monthly fee attached. It’s a safe bet to assume dealers will give the hard sell to families with young children in the backseat or businesspeople who constantly travel by car. Beyond the obvious use cases of Netflix and data-heavy navigation systems, 4G LTE service also means drivers can send SMS text messages by voice dictation, can have their seatmates shop on Amazon while they drive, and take advantage of a whole set of use cases. While drivers and passengers might not necessarily need high-speed Internet in their cars, it’s arrived on the market… and it’s a safe bet to say we’ll see it in most new cars sooner rather than later.




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4 Comments

  • This is insane or plain greed! Why would I, a cost-conscious middle market customer, pay an extra 50 bucks when I already have 4G in my phone and when the data technology changes must faster than the life-cycle of my car?!

    Car companies that build on this insane idea are going to lose out market share to those that bring in an awesome interface (sans data plan) that I can plug in my 4G phone data plan into.

  • It's insane having a title like "chief infotainment officer" in the auto manufacturing business. Stupid people, like the ones loitering in front of you at the traffic light, can't pick and choose what to pay attention to fast enough. People are going to die.

    When the car is in drive, or reverse, the phone/infotainment goes off.

  • nospam

    I'd be happy just for WiFi in my car to update its software on a regular basis. I definitely don't want or need 4G in it, nor the costs that go along with an extra data plan.

  • davidkovsky

    I don't ever want to pay for a separate data plan for my car or get stuck with wireless technology as old as my current car. Just let the car connect to my phone for any data needs. Thanks.