The biggest US phone service provider has released the first performance figures for one of its newest services – the connected-car unit, a segment of business set to explode in the near future.
AT&T said in a filing that around 2 million autos in the US have been using its services directly through its wireless network or via wholesale or retail contracts. Just in the third quarter 500,000 connected cars joined the service.
“The connected-car numbers are strong but not surprising since luxury carmakers are bundling connectivity in with the price,” said Roger Entner, an analyst with Recon Analytics LLC in Dedham, Massachusetts. “The question is: how will the medium and low-end car buyers respond when they have to pay for the service?”
AT&T, aiming to expand its business operations beyond sales of wireless services to phone and tablet buyers, mulls an expansion towards the Internet-connected car business – seeing it as a segment that could reach $1 billion in sales opportunities.
According to research made by consulting firm Accenture, a car’s technology has become the top selling motif for 39% of new-car buyers. The market for Internet-connected cars, vehicle-to-vehicle communications and automated vehicles is set to grow exponentially in the near future. For now, automakers rely on service providers such as AT&T for their self-driving cars, which require a constant Internet connection to download the necessary high-resolution maps.