North America, well specifically the US, was one of the only regions in which you could find unlimited data plans, but now wireless carriers, starting with AT&T, have begun to match the rest of the world by offering tiered / usage based data plans. This has interesting implications for automotive OEMs looking to build the next "connected" car.
To date you had 3 main ways to provide connectivity into the vehicle: Embedd a cellular radio, use data over a voice channel (think Ford's connected services over Airbiquity’s “modem”), or use some creative interaction with data provided by a consumer's handset. I will avoid the word "tethering" because, in fact, most of the carriers used to block formal tethering due to the unlimited rate plans. So this 3rd method I mention involved creative interactions between an application on the users handset and the vehicle. An example of this is PandoraLink.
PandoraLink in essence uses a command and control interface from a vehicle to "speak" to a Pandora application running on a handset and then stream that audio back into the car. This is an excellent approach in the world of unlimited data because you weren't tethering and additionally, as an OEM, you didn't have to absorb (or pass along) the added BOM cost of an embedded radio nor the added usage fees.
Ok so now tiered data is available and restrictions on tethering go away (although tethering becomes quite costly). For services such as Pandora, eliminating unlimited data *may* have an effect, but for some emerging video and gaming services (ex: OnLive) the new approach by carriers will effectively prohibit them from launching in a mobile environment. Different groups argue about the consumption of bandwidth by streaming audio solutions and if a tiered data plan will have any effect.
So looking into my crystal ball what do I think will happen? Well in the past carriers tried to build everything themselves, apps, services, content solutions, etc. Now controlling bandwidth gives them a new negotiating tool. Imagine a popular video or internet radio application. Now a carrier doesn’t have to build a competitive solution to gain incremental revenue. Instead they can cut deals with popular services for revenue shares and then offer packages that remove the data cap for those services. For instance a carrier could cut a deal with a popular internet radio or video service for a cut of revenue and then offer a "OnLive" or “Youtube” data package. 2 gigs of data and unlimited OnLive gaming or Youtube streaming.
So what is the impact for automotive? Well first of all, I think this removes the risk of the unknown as to what will happen when carriers remove unlimited data. The time is now. There are now predictable terms to build connectivity models for automotive around. Tethering will now be a real solution, it will just be up to the OEMs to predict if tethering will be an acceptable option given the added cost to consumers. I also think, now that models are established, there is risk for OEMs and programs that are trying to work around formal tethering through serial connections to content and services. I think this solution will be eventually be disrupted by the carriers, or worse put the OEM in a position that the carriers demand money for accessing this functionality.
If I was an OEM I would start business modeling around the potential revenue that could be attributed to local search, vehicle bus data, etc. and try to monetize it in such a way to support a “kindle” type of plan in a vehicle (either for tethering or an embedded radio).
There is money to be made inside the vehicle its just time to quantify and leverage it.
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I'm Hung Duy, the founder of Xml Blogger Templates (XBT). I'm a freelance writer on topics related to Website Optimization (SEO), blogger customizations and making money online. I'm blogging since 2006 and I'm currently a guest blogger on Blogging With Success.
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