Telematics Developers Gain Ground on In-Car Controls

NOVI, MI – Auto makers and telematics developers are seeking to strike a friendly accord, but one thing is clear: The notion OEMs are calling the shots with in-vehicle applications and other such technology quickly is disappearing.

Verizon Communications’ $612 million acquisition of Hughes Telematics is being called a watershed moment for the industry and will be closely watched, attendees at the Telematics Detroit conference here say.

The communications giant’s purchase signals a growing push toward completely synchronizing drivers and their cars with the mobile and Web-based technologies they use.

“It raises the visibility of the connected car,” Hughes Telematics Senior Vice President Kevin Link tells WardsAuto. The car is the next “node in the network” behind mobile phones, tablets and computers, he says.

The Verizon deal also means auto makers will have to back down – at least slightly – on their demands from third-party vendors that provide the technology.

When telematics first became available in vehicles, auto makers largely controlled which company did the development and how the technology was to be used. The trend now is for more cooperation between OEMs and developers, with the scales tipping toward the suppliers.

Gone also, some say, are OEM-branded “app stores,” another casualty of the developers’ growing prominence. “We don’t believe in the automotive app store,” Ford Global Chief Technologist John Ellis tells attendees.

BMW, for example, curates a variety of apps for drivers with the help of in-house staff and third-party vendors. The auto maker also works closely with some app developers, particularly  Pandora Internet radio, by fine-tuning offerings for tech-savvy consumers.

“At the end of the day, it’s both of our faces on the product,” BMW Engineering Project Manager-Advanced Technologies David Bloom tells WardsAuto. “We look for quality over quantity.”

Hughes Telematics’ Link, whose company works closely with Mercedes-Benz, predicts some car apps will disappear completely. “It will turn into a single button on the steering wheel,” he says.

Instead, OEMs should look to develop cloud-based technology that encourages synchronicity between a customer’s existing devices, rather than pushing for specific car-based apps.

The next hurdle for auto makers is how not to lose their investments in telematics technology if they don’t have full control over development or marketing.

“Consumers are going to expect to be able to use (telematics) for free in their car,” Microsoft Senior Product Manager Steve Bridgeland says, adding it would be unwise for auto makers to continue charging for house-developed apps.

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