AT&T, General Motors to sell 4G LTE-connected cars next year

The smart-car wars heat up as AT&T snatches a deal from Verizon Wireless, which has long been a partner with GM's OnStar unit.

AT&T/GM

BARCELONA, Spain--General Motors cars rocking their own 4G LTE connection will hit the road next year.

AT&T and GM's OnStar service unit struck a deal to bring millions of connected cars to the market, starting with the 2015 fleet, which comes out late 2014. GM said most Chevrolet, Buick, GMC, and Cadillac cars will get wireless connections.

It's the latest win for AT&T, which has been particularly aggressive in going after the connected car business, a lucrative one in which the company believes it can eventually generate a billion dollars in revenue. Furthermore, the deal breaks a long-standing relationship between OnStar and Verizon Wireless, which has been the traditional provider of older wireless services.

"The excitement is you're taking a car and turning it into a smartphone with four wheels," said Glenn Lurie, president of emerging devices for AT&T, in an interview with CNET. "There's an opportunity to do amazing things with the car."

A superfast wireless connection adds a number of possible new services. The high-speed wireless connection can enable OnStar to better track the condition of a car, constantly checking to see if it needs any maintenance now or down the line. Drivers may get more-accurate traffic data and more Internet radio options. Passengers in the back will be able to access streaming movies or television shows.

Or, the car could just offer up a 4G LTE hot spot for tablets, smartphones, and other mobile devices.

"Through this built-in 4G LTE connection we have the opportunity to reinvent the mobile experience inside a vehicle," said Mary Chan, president of General Motors' global connected consumer unit.

GM has said it would release tools to developers looking to create apps to take advantage of the car's connection.

"Developers will be able to take full advantage of 4G LTE speeds as they design vehicle-specific apps, and they can pursue development knowing that they'll have a broad base of potential customers as connectivity is built-in across GM brands and regions," Chan said.

"We don't know what we don't know," Lurie said about the potential long-term capabilities of the car once developers get involved.

On the evolution of automotive platforms, Stephen Girsky, vice chairman of GM, said that the industry would likely start with many different approaches, and that it would evolve into fewer platforms as they mature. He also said during a keynote address at Mobile World Congress that that the development of apps are complicated by the need to protect the driver and car from outside control or hacking.

Common vision
AT&T started talking to GM a few months ago about taking over for Verizon as the wireless provider.

"In our early conversations, we found we had a very similar view of the connected car," Lurie said. "We spent time looking at our network and technology roadmap, and they were impressed."

In January, GM sponsored a Connected Car Challenge during AT&T's Hackathon, which was held alongside the Consumer Electronics Show in Las Vegas. At the time, GM released a new set of vehicle application programming interfaces so developers could take advantage of its infotainment systems. GM has a software developer kit that will eventually allow drivers to add apps and features to their vehicle after purchase.

Lurie said GM was partially won over by the breadth of AT&T's network and its ambitious plans to upgrade the infrastructure under Project VIP . By the time the cars roll out, AT&T will have covered 300 million people with its 4G LTE, which sits on top of its larger -- and older -- HSPA+ network.

A few GM connected cars will be on display at the Connected City section of the Mobile World Congress conference this week.

The move to wireless gives GM, and the broader auto industry, a chance to break away from the reputation that it is slow and lumbering. For once, its cars will be able to tap into the latest innovations and developer resources.

GM said it plans to work with other carriers overseas to connect international brands such as Opel and Vauxhall.

Large opportunity
AT&T isn't the only one that senses the potential in hooking up cars.

Last year, rival Verizon paid $612 million to acquire Hughes Telematics in an effort to expand its auto telematics business. Like AT&T, Verizon has talked up the prospects from the connected car business.

With growth in the traditional cellphone business slowing, the carriers are eagerly looking to connect other devices to spur new avenues of growth, from tablets to more obscure products such as dog collars and medicine pill bottles.

But the automotive industry is one the carriers are particularly interested in. AT&T boasts a few nice wins beyond GM, including Nissan, BMW, Ford, and a recent deal with Tesla.

Traditionally, car consumers have typically dealt directly with a service provider such as OnStar, which includes the wireless connection. While Lurie wouldn't comment on the business model for the coming fleet of AT&T-connected cars, he left the door open to the idea that customers could eventually add their cars to a family data share plan.

"This is really, really exciting," he said. "We're very happy with the momentum."

Updated at 7 am PT: to include a comment from GM.

 

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