By Rob Lever (AFP) – Mar 27, 2011
WASHINGTON — More cars are hitting the information superhighway thanks to new automotive Wi-Fi technology that allows vehicles to become rolling "hot spots."
Analysts say consumers are warming to the notion of more connectivity in their cars, with "apps" for information and entertainment just as they have with their smartphones or tablet computers.
"Initially, putting Internet access in the car sounds like a distraction and frivolous but as time passes it will become a part of our lives and we will feel uncomfortable not having access," said Jeff Kagan, an independent telecoms analyst.
"I think this is going to grow into a vibrant sector."
Market research firm iSuppli said it expects a surge in worldwide shipments of car Wi-Fi systems to 7.2 million units by 2017, from just 174,000 in 2010.
Wi-Fi has been around for several years as an aftermarket accessory but many major manufacturers now offer some form of Wi-Fi or are developing it.
Ford has been offering Wi-Fi in selected models since 2010 and some form of Internet access is also offered by many other major automakers including General Motors, BMW, Audi, Saab and Chrysler.
In mid-March, Finnish telecom giant Nokia announced the launch of a Car Connectivity Consortium of 11 companies with common technical standards, including vehicle manufacturers Daimler, General Motors, Honda, Hyundai, Toyota, and Volkswagen.
Autonet Mobile, a California-based firm that touts itself as the "first Internet-based telematics and applications service platform" for the auto market, has over 10,000 US customers using its CarFi service at $29 a month, said chief executive Sterling Pratz.
The group recently signed agreements with General Motors and Subaru.
Pratz told AFP that consumers are looking for better entertainment options for passengers in their vehicles and use Wi-Fi for videos, gaming and social networking.
"They feel there is a better way to stay entertained in the car compared with the DVD player. They lead a connected lifestyle and when they get in the car they feel disconnected," he said.
A next step, Pratz said, is other types of applications that can allow parents to monitor speeds of their teen drivers and to find their car if it is stolen.
Autonet, which started in 2005 and has funding from venture capital firms, only operates in the US market but Pratz says he plans talks with European carmakers and is considering Asia as well.
In Europe, Audi is using a system from Marvell Technology and Harman Automotive to create a factory-installed mobile hotspot, allowing up to eight devices to be connected.
"I believe today's consumers want the convenience of seamless connectivity and live content whenever and wherever they choose -- whether in the home, office, classroom or automobile," said Weili Dai, Marvell's co-founder and vice president in announcing the system.
"Finally, the car is connected to the rest of our lives."
Saab meanwhile has announced its own system based on Google's Android operating system, dubbed IQon, touted as "a completely new car infotainment user experience."
The Swedish automaker will allow third-party developers to develop "apps" by accessing 500 signals from different sensors in the vehicle.
"With Saab IQon, there are no limits to the potential for innovation," said Saab's Johan Formgren. "We will be inviting the global Android developer community to use their imagination and ingenuity."
Analysts say the market is likely to grow as more applications become available -- for entertainment, navigation or even for diagnostics of the automobile.
Yet a key question for developers of the technology is whether to offer Wi-Fi as a separate data system or allow consumers to bring their own.
Ford's Wi-Fi system called MyFord Touch, which is added to its SYNC connectivity for mobile phones and music players, offers no separate data plan but instead allows consumers to plug in their own devices -- smartphones, tablet computers or wireless cards.
This not only allows consumers to avoid a new data fee but enables easier adaption of a rapidly changing market for wireless devices, said Ford spokesman Alan Hall.
"We created the ability for a customer to bring in their 3G and 4G devices, and the car can take that signal and turn it into a Wi-Fi signal for four or five passengers in the car," Hall told AFP.
Ford expects to have this Wi-Fi system on 80 percent of its cars sold in North America within four years, Hall said, and is also launching the system globally next year.
Doug Newcomb of the auto research firm Edmunds.com said the Ford strategy appears to make more sense rather than asking customers to pay an additional monthly data subscription.
"Several years ago before smartphones and the iPad, (a separate Wi-Fi system) might have made more sense," Newcomb said.
"Now, people are saying, 'If I have an iPad with 3G why would I need this in the car, why should I pay for another data plan?'... I think the focus now will be how to incorporate the smartphone into the vehicle."
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