Machine-to-machine technology revs up with the connected automobile.
Machine-to-machine (M2M) technology has been used in the trucking industry almost since wireless networks were invented. Onboard computers started to appear in vehicles in the 1980s and it didn’t take long for companies to connect them to cellular and satellite-based wireless networks, helping companies with huge fleets of vehicles track shipments, monitor driving and comply with government driving regulations.
Now after decades of use in the enterprise space, the technology appears poised for a major move into the consumer market, opening a new range of M2M technologies suited for the needs of everyday drivers.
Cars already are being outfitted with high-end entertainment systems, mobile television, engine performance monitoring systems, even modules that track driving habits to proactively adjust insurance rates. Companies that manufacture the individual components for the in-vehicle systems are already benefitting from the trend, with sales of in-vehicle technology topping $9.3 billion last year, according to estimates from the Consumer Electronics Association.
Car manufacturers and major players in the wireless industry envision a future where cars, especially hybrid electric models like the Prius, will be an extension of the mobile experience, with content and applications from the handset weaved into in-car navigation, entertainment, security and safety.
“There’s two things Americans love. The first is television and the second is their cars,” says Steve Hilton, an analyst at Analysys Mason.
Hilton says the U.S. market is prime territory for connected vehicles because of the amount of time Americans spend in their cars compared to other countries. “Commute times are outrageous and public transit isn’t all that,” he says. “I like the idea of more connected technology in the car.”
Nokia and Alcatel-Lucent also like the concept. Both have announced initiatives to extend mobile technology into the car. Alactel-Lucent says its LTE connected car concept, developed through the ng Connect program in 2009, is a smartphone on wheels. Billing the concept car as a “powerful new category of mobile device,” the infrastructure giant integrated entertainment, security, navigation and vehicle performance into a Prius, and it’s all connected wirelessly through an in-vehicle Wi-Fi network and LTE.
Nokia’s Terminal Mode specification, developed this spring with the Consumer Electronics for Automotive working group, aims to be an industry standard that can be used to link smartphone apps to in-vehicle computers. The technology integrates content on Nokia devices with a car’s dashboard system, including turn-by-turn navigation. The technology also allows smartphones and vehicles to exchange information.
The move towards a smarter car is being driven in part by hybrid electric vehicles that use more computer technology than their combustion engine counterparts. Hybrid electric vehicles like the Prius incorporate computers in all areas of the vehicle to maximize energy efficiency, from determining whether the engine should use battery power or gasoline to rolling down the windows.
Running consumer applications on top of this existing computer power is the logical next step for car manufacturers, says Yankee Group analyst Dmitriy Molchanov. “This is a growing space and I certainly think five years down the line, consumers will be asking for embedded technology,” Molchanov says.
Automakers are priming the pump by rolling out cars with sophisticated entertainment systems and already use wireless technology, including apps and Flo TV’s mobile television service.
“Most car makers are introducing a combination of connected systems and services in lower vehicle segments and embedded solutions in the luxury and near-luxury segment,” says Roger Lanctot, an automotive analyst at Strategy Analytics. “Every car maker that I know of is preparing to launch telematics systems.”
Ford’s Sync technology has been installed on 2 million vehicles, with a million of the installations happening in the past year alone. The company says one-third of its customers who own Ford vehicles with Sync say the technology was a key part of their purchase decision.
Sync lets drivers use voice commands to operate MP3 players and Bluetooth-enabled phones, and also lets users plug their mobile USB dongles into the car for Internet connectivity. The service allows drivers to access information ranging from their vehicle’s health report to real-time traffic information.
Jim Buczkowski, a director for global electrical and electronics systems engineering at Ford, says the company launched the product in response to customer demand. “As phones get smarter and smarter, people want to use their phones to bring content into the vehicle.”
Ford created Sync as part of an effort to make it safer for people to access mobile content while driving and plans to expand the service to smartphone applications later this year through a product called AppLink. The service will allow drivers of the 2011 Ford Fiesta to control three apps for Android and BlackBerry devices, Stitcher, Pandora and Twitter app Openbeak, with voice commands and vehicle controls.
Buczkowski says having the infrastructure in place to support mobile content in vehicles, such as the ability to integrate Sync with devices and offer cloud-based content to drivers, has opened up Ford to a whole new realm of technologies. “You can only imagine what will be possible,” he says. “Ultimately, we’re trying to do the market research and determine what has the best value for customers.”
M2M IN CARS: THE TOP LINE IMPACT
The use of M2M technology will have an effect on the top line of module vendors, wireless operators and content providers, but the impact could vary widely depending on whether consumers end up favoring content streamed on cellular networks or content streamed from devices to in-car systems over Bluetooth.
For now, the industry seems to be leaning toward systems that transfer a phone’s existing media content to in-car screens using Bluetooth at no additional cost to the user. This means content providers won’t necessarily benefit from in-car entertainment systems and also cuts out the need to stream bandwidth-intensive content over cellular networks, shutting a potential future revenue stream for operators.
On the other hand, demand for Internet access in vehicles will generate additional traffic for operators and some companies are betting the live content model will win out in the long run.
Already, Ford’s Sync lets passengers plug a USB dongle into the car’s center console, which creates an in-vehicle Wi-Fi powered by cellular networks. The deployment of 4G networks could positively affect consumer demand for streaming content as well. Alcatel-Lucent’s forward-looking LTE concept car banks heavily on streaming content with the integration of live content from Atlantic Records, Kabillion’s video-on-demand service and Chumby’s Internet device.
THE COST OF CONNECTIVITY
How this in-car wireless connectivity is going to be paid for is still a matter of debate. Industry analysts believe that consumers will be hesitant to add another subscription onto their wireless bill to add Internet access to their vehicles.
Molchanov believes that wireless connectivity in cars could be subsidized by advertisers and insurance companies. Insurance companies may offer subsidies on in-car wireless service in exchange for drivers agreeing to install a tracking module onto their cars. The module would track driving habits and allow insurers to raise premiums if they determine a car is being driven dangerously.
Hilton disagrees with Molchanov on the viability of the insurance model because of the amount of information drivers have to disclose to insurers. The module used by Progressive in its MyRate program tracks several different driver behaviors, including acceleration, deceleration and how fast a car is moving, through a module drivers voluntarily plug into their car in exchange for insurance discounts if the tracker reports safe driving habits.
The company says it has signed up 100,000 people for the service since it launched in 2008, but Hilton doesn’t think it’s a viable model for other applications. “I’m not convinced Americans are willing to divulge that much information,” he says.
By the time connected cars become ubiquitous, carriers may offer plans that bill customers based on their data consumption across a range of different devices instead of current per-device subscription models.
Wireless connectivity also could be subsidized through value-added services for cars, particularly around security applications. Insurers, car dealers and owners are willing to pay for the ability to track the location of a stolen vehicle or have the car automatically call for help when the airbag is deployed, such is already being done with Ford Sync and OnStar, argues Hilton. “I see an easier return on investment for a solution like that,” he says.
In a future where everything is connected, from appliances to the electric grid, embedding wireless technology into cars is a logical extension of the smartphone experience. It could be years before the mass market sees smartphones on wheels, but they’re definitely coming.
UPS Backs its Fleet with In-House M2M Tech
Many of the M2M technologies finding their way into consumer vehicles have roots in the enterprise transportation segment, where M2M is firmly entrenched in telematics, fleet tracking and engine maintenance applications.
Shipping giant UPS has a global fleet of nearly 100,000 vehicles, including 96,000 cars, vans, tractors and motorcycles. The company has developed an extensive inhouse system based on M2M technology to monitor every aspect of a vehicle’s performance, from the condition of individual engine parts to the amount of time a driver lets a truck run idle every day.
“The little things add up pretty quickly when you have a large fleet,” says Mike Hance, vice president of automotive engineering at UPS. UPS uses wireless modules to track seatbelt usage, whether doors are left open or closed, the individual health of each engine component, acceleration, deceleration, idle time and route traveled. The information is stored on the truck until the vehicle returns to the UPS garage at the end of the day, when it’s transmitted on a short-range 900 MHz radio system to UPS’ central system for analysis.
Hance says the use of M2M technology has helped UPS switch to condition-based maintenance instead of scheduled maintenance. Before rolling out the technology, UPS serviced each of its vehicles on a predetermined schedule whether or not a part was worn out. Now, UPS monitors signals sent by wireless monitoring modules to tell whether a part needs to be replaced.
“We’re able to change parts proactively before they fail but do so closer to the end of its lifespan,” Hance says. “This helps us defray the costs of our parts and components because we’re able to use them for a longer period and also helps us with the reliability of our fleet so our vehicles don’t break down.”
The technology has helped UPS reduce the amount of time vehicles are left idling by 15 minutes every day, resulting in lower fuel costs.
The software side of UPS’ fleet management technology was developed in-house. Hance says the hardest part of implementing its telematics solution was putting the vast amount of information collected by the M2M modules into a usable format. “The practicality of the information was missing,” he says.
Using third-party hardware and in-house software engineers, UPS’ product management group worked to develop technology that stripped out unnecessary information while highlighting pertinent facts, like when an engine part was about to break down. “The biggest challenge with telematics is how you manage all the details,” Hance says. “What we’ve been able to do with algorithms is develop our own software to tell us only what we need to know.”
UPS has installed wireless modules on 22,000 of its vehicles and plans to expand the technology to an additional 10,000 vehicles by the end of this year. About one-third of UPS’ fleet will be outfitted with extensive M2M technology by 2011, with additional deployments planned in the years to come.