Just days after announcing plans to acquire Hughes Telematics for $612 million, Verizon Wireless said it has partnered with a group of automotive companies to form the awkwardly named 4G Venture Forum for Connected Cars. The “forum” tasks itself with pushing “the pace of innovation” into the LTE-enabled automotive and telematics ecosystem, and is an extension of Verizon Wireless’ previous work through its 4G Venture Forum.
Initial partners with Verizon Wireless include BMW, Honda, Hyundai, Kia and Toyota, as well as MIT professor Sanjay Sarma. The group said it will work on ways to deliver cellular connectivity to vehicles using open standards and to help support the development of an LTE-based ecosystem.
“The 4G Venture Forum for Connected Cars will help discover ways to increase the value of services, ranging from embedded cloud-connected solutions to mobile applications; help define features and explore safety systems; and encourage third-party developers in this space,” the collaborators noted in a statement.
No word if the support would also include various spectrum bands currently being used to deploy LTE services, though the group did note that it would support and fund opportunities regardless of underlying network technology and that members were not obligated to work with Verizon Wireless on solutions. Verizon Wireless already has a significant foot in the telematics space by providing cellular service to General Motors’ OnStar service.
Juniper Reserch released a report earlier this year forecasting that intelligent vehicles embedded with wireless connectivity could generate up to $14.4 billion in revenues by 2016, at which point up to 92 million vehicles will have some form of Internet connectivity and the ability to integrate smartphone functionality.
“Intelligent vehicles can now come equipped with features including safety, security, navigation and emergency service access under the same subscription,” said Anthony Cox, the report’s author. Cox added that targeted services for insurance and stolen vehicle recovery are also gaining momentum through regional players and that the United States was currently at the forefront of deployments.
Bottom Line: The telematics space has for years been viewed as a significant growth opportunity for the cellular industry as consumers look to remain connected at all times and automotive manufacturers look to increase the appeal of their products. This deal shows that many of the biggest players continue to see great potential and that partnerships will be vital to success in the space. However, as with most deals to this point, there remains a lot of gray areas in this agreement that would seem to diffuse the potential. Plus, continued concerns over distracted driving will likely keep players at arms length until legal ramifications can be hammered out.
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