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Ford And GM Forge Different Wireless Paths

This article is more than 10 years old.

America's biggest car makers have realized the cars they make are in fact the ultimate mobile devices - moving at speed, and  pushing faster data speeds too. Both Ford and GM are moving to make their cars smarter with web capability, but they announced different strategies at Mobile World Congress today. While GM announced it was partnering with AT&T to bring wireless connectivity to its cars next year, Ford partnered with an Internet player, music streaming service Spotify, using iPhones as the wireless hubs for its cars.

Ford's strategy offers more in-car development, sooner. It only has to wait for Spotify to release an update to its iOS app (which it says will be in the first quarter of this year) and drivers who have Ford SYNC in their car will be able to use Spotify in the Car with voice commands.

Ford has done well to encourage developers to tailor their services for Ford SYNC, courting them by releasing a free API, and maintaining the apps fundamentally just need to run on the iPhone. Among the key adjustments developers must make is working with Ford's voice-controlled AppLink system, powered by Nuance.

Spotify first talked to Ford about collaborating a year and a half ago. It then started experimenting with Ford's voice-activated service, then updating Spotify so it could work in Ford cars. Interestingly, there were no safety and regulatory hoops to jump through -- so long as they fit into the Ford template, which doesn't allow things like scrolling text on the dashboard screen, their app was fair game.

"The biggest hoop for us was usability," said Pascal de Mul, Spotify's head of global hardware partnerships. "We'd rather hold back than launch something we don't want to believe in. That's why we worked on this for such a long time." De Mul added he was "happy with the patience that Ford has had with us as well."

Ford is eager to bring mobile features into its car as soon as possible. "We're very developer-oriented," said Douglas VanDagens, the director of Ford’s Connected Services division. "The reason people are working with us is we've made it easy for them to develop on our platform." Around 2,500 developers have signed up since January to develop apps that work with Ford SYNC.

When asked about General Motors' strategy of partnering with AT&T and having wireless connectivity piped directly into its vehicles, VanDagens said that meant technology in the car -- both the software and the hardware -- would move slowly. Not only does the technology linger on the drawing board for three years, there's a five-year development for the in-car technology and then another nine years on average for the car's life cycle, he said. Such a strategy made developers beholden to the drawn-out automotive lifecycle.  "For infotainment we want you to bring in the latest tech you have on [an iPhone], with the latest capability and the latest apps," he said.

Glenn Lurie, emerging devices president at AT&T, says slow-moving development is a misconception. The carrier's plans to put wireless connectivity into GM cars will not lead to fewer updates and slower development times, because the car is constantly connected, Lurie said, and so it can make updates all the time. Drivers should be able to have the options of both their smartphone and their car to get connected. "It's easier," he said in an interview, adding that AT&T had partnerships with Ford too.

Lurie has publicly said that AT&T sees the connected car as a "billion dollar business" by revenue, though he has not given a timeline. "A few years ago we were the first to carry the iPhone, and we didn't know we were going to be here today," Lurie said, adding that the deal with GM held similar significance for AT&T's future.

This is because while AT&T largely plays the role of boring utility for iPhones and other smartphone devices, with cars it has the opportunity to do much more -- for instance creating software services and in-car diagnostic, security and entertainment features.

It can probably also derive bigger margins from deals with car makers, not least because a car has a higher price tag that a smartphone. Ford, by contrast, doesn't have to strike any deal with any carrier to build its own ecosystem for developers through Ford SYNC, though carriers do benefit from the extra data being used.

If AT&T can provide an extra SIM card in the car, therein lies more options to provide data, said Chris Hill, senior vice president of AT&T's advanced business solutions. The "huge returns" are possible but "they need to be well thought out and scalable and what to do with all the data when its comes out."

Bottom line, consumers will likely be paying extra for forthcoming in-car features. OnStar, the GM subsidiary that will be carrying the new AT&T features next year, charges $299 a year for its service. Ford Sync is either free or an extra $295 on top of the price of the car. And then there's all that data drivers will be using, either through the car's SIM or through their iPhones. Wireless connections don't come cheap, especially when they're on the road.