On a conference call with Wall Street analysts discussing its first-quarter earnings, GM Chief Executive Daniel Akerson, a former telecommunications executive, played up the potential of building 4G service into vehicles, which in theory could offer enough data bandwidth for everything from streaming ads to mobile video service:
With a 4G pipe into a car, you can change the business model almost entirely. You may be able to have a real revenue generating opportunity into the car with – when you come up for example, what happens if when the logo shows on your screen and its brought to you by Allstate?
Akerson also offered another example of letting children start TV shows in the home, then pick up where they left off in the car, a.k.a. Netflix. As for the business model, GM Chief Financial Officer Dan Ammann said GM would get $20 per connected car subscriber from AT&T, along with a share of revenue — much like Apple gets for the iPhone today — instead of the zero dollars it currently receives from telecom providers.
Of course, there's a long road to turning GM's OnStar service into an iPhone on wheels, starting with the iPhone itself. Apple and other cellphone builders have designs on making their devices more indispensable behind the wheel — which could make in-car systems redundant. Then there's the question of cost and billing; GM hasn't said how much it plans to charge for Internet access, but executives hinted there would be some way for a customer who already had AT&T devices to easily add a GM 4G vehicle to their plan.
The real challenge will be finding the right level of demand. Automakers have dabbled with mobile entertainment before such as mobile TV and failed; the sole exception, satellite radio, has thrived because its a form of media that can be enjoyed by a solo driver. Those rectangular screens we're always staring at do a lot more than the typical displays in the dash of a car. It may take more to break our gaze than a few ads.
- Technology & Electronics