On November 29 at the L.A. Auto Show, Sprint announced a new product dubbed Velocity that is an in-vehicle communications platform for automotive manufacturers. The in-dashboard product will have capabilities to deliver music, news, weather, sports and other infotainment features, security, navigation, remote connections for mobile devices, emergency services and engine diagnostics. Sprint will support global deployment via its many partnerships with multiple network providers, and let a customer connect an embedded head unit or mobile phones to applications like voice-activated texting and e-mail. Automotive OEMS will have the option of taking either a modular approach to meet custom needs, or use the product as a turnkey solution.
By partnering with technology providers such as Airbiquity and Wireless Car, Sprint is significantly reducing the development, integration, and selection requirements faced by an automotive OEM for this type of technology. It also opens up the range of products that Sprint offers in the machine-to-machine segment and positions itself at the high end of the value chain among the technology providers supporting the Velocity product.
For automotive manfacturers, it really provides three key opportunities: the potential for higher margins for vehicle dealers; product differentiation; reducing the complexity of supply chain; and utilizing a business model that delivers effective cost and quality for the product.
As a network provider, Sprint expands its product line-up with a higher value machine, and positions itself well in the market and supply chain as well as providing another revenue stream via a billing service to the machine. In addition, the product aids automotive OEMs by reducing complexity in the supply chain. However, this does bring to the forefront a question of how many subscription services is the "connected" customer willing to pay? As consumers or enterprises continue to acquire and support multiple devices, the burden of paying for service on these devices is going to increase. In most scenarios, these different subscriptions are using data for various services. Network providers need to evaluate their business model, and think about billing based on access versus billing by each individual device. Future service plans need to be built around network access and data consumption versus device connections.
Similar to the product Sprint is bringing to the market, in 2007, Ford Motor Company launched a factory-installed, integrated in-vehicle communications and entertainment system called SYNC. The SYNC system runs on the Windows Embedded Automotive operating system designed by Microsoft and consists of applications and user interfaces developed by Ford and third-party developers. SYNC is only available in Ford products, and some features of the product are limited in markets outside the United States due to compatibility issues, in particular, voice command services such as turn-by-turn directions in Canada.
Sprint's new product certainly reflects the future of "everything is connected", and is a glimpse of what the world of machine-to-machine may deliver. To be competitive the product needs to ensure seamless integration: the ease of upgrading operating system software for vehicle radio, and navigation systems as well as applications; a high level of functionality; and supporting features and functions of mobile field workers in different industries. If Sprint can deliver the highest level of functionality in areas such as navigation and web browsing, it has an opportunity to edge out current technologies such as Bluetooth that many drivers employ to access some of the same functionality provided by in-vehicle communication platforms, and users that have been accessing similar capabilities via mobile phone or tablets in their vehicle.