Putting the mobile into automobile - Mobile World Live

Putting the mobile into automobile

15 MAR 2012

When Henry Ford began selling his cars in the early 20th century, the first generation of car owners often lacked suitable roads to drive them on. It is a problem now facing the motor industry over a hundred years later as the world’s road networks approach bursting point. The auto industry has faced significant challenges in the past – environmental concerns, for example – but the threat of a “global gridlock” may be its biggest issue yet.

This was the key message delivered by Henry Ford’s great-grandson, William “Bill” Ford Jr, in his keynote address at Mobile World Congress last month. He forecast that the number of cars on the road would grow four-fold from today to reach 4 billion by mid-century, with “crippling congestion” predicted in fast-growing regions such as Latin America and China if the issue isn’t addressed.

In Sao Paulo, according to Ford, traffic jams regularly exceed 100 miles and the average commute lasts between two and three hours a day – though car purchases in Brazil are still growing by 7.5 percent a year. China, meanwhile, boasts the unenviable record for the world’s longest period of gridlock for a jam in 2010 that lasted a nightmarish 11 days. For an industry that markets its product as a gateway to freedom, this kind of thing represents a public relations disaster.

Bill Ford’s keynote in Barcelona – the first ever by a car-maker at Congress – may come to be seen as the auto industry’s first serious attempt to reach out to the mobile sector for a solution. And it also highlights the fact the emerging M2M sector should now be considered a mainstream concern for operators looking for the next growth opportunity. A recent GSMA-commissioned study by Machina Research calculates that the total M2M market could be worth US$4.5 trillion by 2020 (a figure boosted by “cost reduction and service improvements” as well as direct revenue). Moreover, the so-called ‘connected cars’ sector is expected to account for the lion’s share of this opportunity, potentially worth US$600 billion alone and creating new business models such as Pay-As-You-Drive (PAYD) insurance along the way.

But the market for connected cars is highly complex and still loosely defined. Some of the early collaborations (as evidenced by the announcements by the likes of Ford and BMW in Barcelona) are not ‘real’ M2M solutions, but simply efforts to embed smartphone-style functionality into vehicles. In-car connected services such as navigation, infotainment and safety alerts will add value to consumers and provide a key differentiator for car-makers – but they won’t do much to alleviate Bill Ford’s “never-ending traffic jam” until the cars start talking to each other directly.

Using Ford’s ‘Blueprint for Mobility’ roadmap as a benchmark, it’s not until the mid-term (2017 to 2025) that things start getting interesting. By this point Ford and others are expected to be rolling out initiatives such as semi-auto-piloting, vehicle platooning and accident prevention sensors on a large scale, underpinned by vehicle-to-cloud and vehicle-to-infrastructure communications. The auto industry’s long-term vision (2025 and beyond) is to build a fully integrated transport network in which cars are just one element. Instead of jams, the roads will be filled with what Bill Ford termed “a rolling collection of sensors” that will help people get to where they need to go, quickly, safely and economically.

That’s the big vision. To achieve it will require unprecedented cross-industry collaboration, new business models and a consistent regulatory framework.

One challenge on the mobile side is immediately obvious if you consider a firm such as Ford as a ‘big ticket’ M2M customer. Ford is a global firm that requires a global solution but there’s not an operator today that can match its reach. M2M roaming may be a useful revenue stream for operators in the short-term but they will eventually need to knit together a global network to effectively support global customer demands.

Another area that will require a rethink of existing operator business models relates to the new types of data that will be running across the cellular networks. M2M traffic may not run into the same capacity problems caused by consumer data but there will be significant challenges in areas such as signalling. Plus, an industry hell bent on maximising revenue per connection will now need to support, by comparison, an ultra-low-cost model that won’t necessarily price per-megabyte or be seen as valuable use of precious spectrum resources. And, of course, M2M customers will not be the end-consumers that operators primarily deal with today and each will require an entirely different solution, requiring dedicated customer support and sales teams. A whole industry has emerged led by specialists like Jasper Wireless – and increasingly large vendors such as Ericsson – to help operators adapt their networks and business models to this new world.

But, ultimately, the key challenge is not technical but logistical; namely the ability to get all the various stakeholders working together, which will mean rival car firms, device-makers, network operators and regulators moving in the same direction on a uniform approach. It’s a long road ahead, but as Bill Ford told the mobile industry in Barcelona last month, the prize for getting this right will be a great one.

Matt Ablott

Nb: My Mobile World Live TV panel on M2M, featuring representatives from Ford, Machina Research, Jasper Wireless and WeDo Technologies can be viewed here

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Members