They're calling it the connected car -- and it's already here. It's the intersection of vehicle and Internet. From wireless Internet in your car to "over-the-air" updates that can even provide instant upgrades to the physical capabilities of your car, the connected car concept will change what we know about vehicles. With the help of AT&T (NYSE:T), a few auto manufacturers like Tesla (NASDAQ:TSLA), Audi, and General Motors (NYSE:GM) are already on board with the technology. Where's it headed?
AT&T dives in
Among wireless Internet providers, AT&T is the most invested in the future of the connected car. AT&T's head of emerging devices, Glenn Lurie, asserts that bringing the Internet to the vehicle will help it transition from a mindless machine into an intelligent gadget, according to CNNMoney. In the article Lurie says, "The car is really just going to become another device in your life [...] Our view at AT&T is that everything is going to be connected [...] making the car easier to use, safer, reduce distracted driving and deliver infotainment."
This comment follows two consecutive announcements from AT&T this week that the company will provide high-speed wireless Internet connectivity for the new Audi A3 family in the U.S. and current and future Tesla vehicles in North America.
General Motors announced in early 2013 that it would be embedding LTE chips in millions of its future vehicles to connect to AT&T's 4G network. After providing more details at the beginning of this year, GM is now saying that the rollout will begin this summer with its new 2015 Corvette, Malibu, Volt, and Impala, according to GigaOm.
What are the perks of Internet-powered vehicles? The AT&T-Audi press release boasts wireless hotspots, picture navigation, social media, mobile app integration, and over 7,000 Internet radio stations. Tesla's arrangement provides "remote engine diagnostics, telematics, and industry-leading infotainment features such as Internet radio, Web browsing, live traffic, weather and navigation, all accessed through the 17-inch touchscreen."
There are many benefits of a connected car, but Tesla CEO Elon Musk said it best: "[It] will help Tesla continue to deliver a cutting-edge ownership experience." A connected car will ultimately change many facets of the vehicle experience.
But we're just scratching the surface. Car manufacturers and tech companies are finding new ways to work together. It was evident at the Consumer Electronics Show this week in Las Vegas, which a record nine auto manufacturers attended, according to Automotive News. Even more, Samsung, who plans to use its technologies in vehicles, showed considerable interest in the growing connection between the Internet and vehicles at CES. Automotive News reported that Samsung plans to "parlay" its smartphone technology into automotive navigation and entertainment systems.
Arguably ahead of its peers in the connected car ownership experience, Tesla has gone as far as providing physical improvements to its Model S with its over-the-air updates. Examples include a lift to the suspension at highway speeds and automatic detection of unexpected fluctuations in the input power to the vehicle triggering the Model S charging system to reduce the charging current.
Probably mass adoption of Internet in vehicles. GM, Tesla, and Audi are simply a taste of what's to come. The chance that the "Internet of things" will likely have at least some effect on your next new vehicle purchase is pretty good.
What will the connected car look like? Hop in a Tesla Model S for a test drive, and you'll get an idea.
What can investors do with this information? Acknowledge the inevitable shift to connected cars, and keep an eye on the development to see if it affects any of your holdings or reveals new investment opportunities.