GM to offer 4G mobile Internet access in most ’15 vehicles

GM to offer 4G mobile Internet access in most ’15 vehicles
Thu, Jun 13

General Motors Co. Chairman and CEO Dan Akerson said Thursday that the automaker thinks cars and trucks will become the “next major technology platform,” and it plans to leverage its OnStar unit’s size and services and new 4G LTE mobile broadband to help it bring more connected services to consumers.

GM said the average U.S. consumer uses their smartphone and tablet for more than 2.5 hours a day, exceeding the 15 hours a week people spend as a driver or passenger in a car.

“Marry the two and you have a megatrend that we intend to harness for competitive advantage,” Akerson told the Chief Executives’ Club of Boston, according to prepared remarks.

More than two-thirds of people who buy a new car have a smartphone, according to a recent J.D. Power study. GM said 80 percent of them say connectivity “strongly influences” their car purchasing decisions.

“Personally, I think they’re under-calling the market,” Akerson said in the remarks. “The number will be 100 percent before you know it.”

And GM believes it is far ahead of competitors because of safety and security features OnStar already provides to more than 6.5 million customers globally and because it is planning to offer 4G mobile Internet access into most 2015 GM vehicles sold in the U.S. and Canada, beginning in mid 2014.

“People want connectivity to keep them out of accidents and traffic jams, keep their cars from breaking down and keep their kids entertained — or at least occupied,” Akerson said in the remarks.

Some automakers offer embedded 3G Wi-Fi in a few models, but GM’s partnership with AT&T will help customers have faster download speeds and gives the ability to process voice and data at the same time, the Detroit automaker said. And drivers won’t need a smartphone or tablet to use the services.

The 4G connection could help deliver services such as the vehicle predicting it needs a new battery and then scheduling a visit to the dealership, calling ahead and paying for a food order, and being able to stream movies into the backseat, Akerson said.

“The core of our strategy is to do a better job satisfying customers than anyone else,” Akerson said in the remarks. “That’s why we’re going to turn millions of our cars and trucks into nodes on the Internet through the industry’s largest global deployment of 4G LTE.”

Analysts agree that GM may be in a unique position to benefit from the 4G rollout.

Citi Investment Research analyst Itay Michaeli wrote in a recent note to investors that IHS Automotive estimates GM’s 4G rollout may boost OnStar’s profit by $400 million in 2016 and by $550 million in 2018.

GM also is making available its mobile and in-vehicle application interfaces with developers on a website called to help it offer apps to be used in and outside the vehicle. Akerson said it’s possible that the GM App Shop could someday be as popular as iTunes or the Android Marketplace.

Phil Abram, GM’s Chief Infotainment Officer, told financial analysts Wednesday that 1,800 developers have registered on the site since January and about half are downloading framework from it.

Abram said the company will approve all applications and they must meet the automaker’s stringent safety guidelines around distracted driving. He said the apps GM approves will help improve the company’s infotainment systems over time.

GM said its integrated connected offerings will help prevent distracted driving.

“To me, there is nothing scarier than a texting driver looking down at his handset,” Akerson said in prepared remarks. “But if done right, technology can actually be part of the solution to keeping drivers’ eyes on the road.”

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