Chevy Malibu embraces in-car Wi-Fi even as appeal remains questionable
May 16, 2014
General Motors will launch 4G LTE service for the new Chevrolet Malibu this summer, making it the latest carmaker to embrace in-car Wi-Fi for its perceived opportunities, even as questions about consumer demand remain.
In-car Wi-Fi opens the doors for consumers and enterprises alike to add or bring in value to the automotive environment and a growing number of new car models are beginning to come standard with some level of broadband wireless Internet access. While Wi-Fi connectivity is critically important for connected car experiences, it is not clear on how effective such features will be at attracting consumers.
Yankee Group survey data consistently reveals price as the top consideration for US consumers. The real challenge for connected car solutions providers will be to bring their value-add to the fore, regardless of channel, said Ryan Martin, associate analyst at Yankee Group, Boston.
Getting the pricing model right will be essential to driving both consumer demand and new, services-oriented business models," he said.
Mr. Martin is not affiliated with General Motors.
General Motors did not respond to press inquiries.
While analysts question the demographic for the technology, GM's OnStar marketing has chimed in, and taken an interesting approach by illustrating to parents the benefits of occupying manic children with digital games and online movies.
The OnStar service will offer multiple data plans, with monthly fees ranging from $10 to $50 a month for those still liminal, though there is an option to purchase set amounts of data usage over a year length service, which run from $5 to $200.
While in-car Internet access and built-in Wi-Fi seem to be going mainstream, they are not entirely new.
Since 2008, Chrysler has offered dealers an installed Wi-Fi modem that can tap into 3G networks and create an in-car hotspot. Audi offers Connect, an infotainment system which packs features including Google Earth, real-time Sirius XM Traffic info and WiFi for up to eight devices. Similarly, Dodge offers a system comparable to Audis on its popular Ram pickup
The Audi Connect system
Some of the functionality enabled presents genuine appeal including real-time traffic data, enhanced maps, streaming music, but the idea of a car as a Wi-Fi hotspot is more questionable.
An invitation to even more distraction in one of the most dangerous environments for individuals causes one to ponder why this is even necessary. After the end of the free trial period, a $30 monthly data plan bill seems highly redundant considering most mobile devices can access the same networks being offered by automakers.
In some cases, smartphones can connect to faster 4G networks and even spawn their own Wi-Fi hotspots without the need of additional equipment in-car.
Out of sync
Many automakers jump at the chance to hand off Internet connection to a drivers mobile phone.
Fords Sync system pairs with Android, Blackberry and iOs devices to run apps and can turn a smartphones data connection into a hotspot.
BMWs ConnectedDrive does much the same except with a users own LTE SIM card. Catering to premium and business class customers, luxury car brands try to target the upper market, knowing that these types of tech solutions do not resonate with all consumers.
BMW's ConnectedDive is particularly distracting when pairing apps
General Motors will join in on the game in June, when it launches 4g LTE service for the new Chevrolet Malibu.
OnStar video chat feature
Communications providers are also along for the ride, allowing existing customers to bundle in-car service plans with their current phone carrier subscriptions.
For those not in disdain of the expense, and that value the in-car utility, the built-in systems may still prove problematic in the future, since automotive and tech life cycles may be out of sync.
Every year faster connections and new features swiftly antiquate in-car equipment. It is not unbelievable that todays tech protocols will become outdated in only a few years from now, causing the technology in current vehicles to become archaic.
Honing in on the right incentive structures to drive connected car uptake will ultimately determine the effectiveness of companies' ability to monetization their investments. And to a large extent, this will depend on the stickiness of a given solution, Mr. Martin said.
It's still early days for the connected car market, but smartphones and other mobile tech pose a credible threat to the types of content and services consumers have come to expect in cars. But I'd expect such substitutability will also present itself as an opportunity for companies with the resource and market standing to layer their offerings across the various IoT verticals.
Michelle Saettler is editorial assistant on Mobile Marketer, New York
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