Connected cars on slow road to perfect business model

TyN Staff

The connected car market appears a long way from establishing a business model that will ensure the industry achieves its full potential, to judge from comments in a panel discussion featuring AT&T, Cox Automotive, Convey and Sequans.

The most damning comment during a dedicated ‘Connected Car’ conference track here this afternoon was provided by Kevin Link, chief creative officer at Convey (a company specialising in marketing for the IoT industry) and a co-founder of Hughes Telematics (recently acquired by Verizon). “The business model is broken,” he argued, claiming that there is no agreement on the best strategy around who pays for connected car services – and how.

“As a result the takeup rates are pretty low. Probably 70 per cent of the audience has a connected car but only some of them pay a subscription. OEMs have to step up to the plate as there’s value there for them. If we burden consumers with subscriptions then it will never happen.”

Link praised AT&T’s efforts to include connected car services in its shared data plans but urged other operators to follow suit. Without such an approach, he claimed, “we’ll never get 100 per cent connectivity.”

Craig Miller, VP – Worldwide Marketing at 4G chip manufacturer Sequans, described the market potential as “enormous,” but stressed the industry “needs to overcome the friction in the business model between application developers, OEMs and operators – how do developers get paid and continue to innovate?”

Mike Burgiss, VP of strategy at Cox Automotive’s Mobility division, also talked positively of AT&T’s progress and shared hopes that the trend in the US away from car ownership (to a shared fleet model) will benefit the connected car market. “The car is shifting to being a service. There are new models emerging and signs that car ownership will decline. Ford is making moves from being a car company to a mobility services company.”

AT&T’s Cameron Coursey (VP – Product Development) was less critical of the industry’s progress in this area so far. Referencing the one million connected car connections it is adding a quarter, and its total base of more than 10 million, Coursey described the connected car business model as “evolving”. Coursey wasn’t convinced the industry will be able to develop one perfect business model, instead different parts of the world and different markets will require their own strategies.

 

 

 

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