Cars with Wi-Fi hot on lots

Drivers seek connection with music, phones, not highway

Worker Aaron Perry sorts the artwork for the General Motors Co. stand ahead of the 2014 North American International Auto Show (NAIAS) in Detroit, Michigan, U.S., on Thursday, Jan. 9, 2014. The show, which featured 71 vehicle debuts and attracted 795, 416 visitors in 2013, begins with a media preview on Jan. 13 and opens to the public on Jan. 18. Photographer: Jeff Kowalsky/Bloomberg *** Local Caption *** Aaron Perry

Worker Aaron Perry sorts the artwork for the General Motors Co. stand ahead of the 2014 North American International Auto Show (NAIAS) in Detroit, Michigan, U.S., on Thursday, Jan. 9, 2014. The show, which featured 71 vehicle debuts and attracted 795, 416 visitors in 2013, begins with a media preview on Jan. 13 and opens to the public on Jan. 18. Photographer: Jeff Kowalsky/Bloomberg *** Local Caption *** Aaron Perry

Monday, January 13, 2014

When the time arrived to trade in her Ford Explorer in September, Svetlana Friedman had a condition: No more basic radio. She wanted a car that could connect to her smartphone, her iPad and her digital life.

“I didn’t want to go back to a base model where I can’t talk on my phone and listen to my music,” Friedman, 33, said during a voice-activated, hands-free call from her black 2014 Explorer. “This definitely makes life easier.”

Forget horsepower. The connected car is becoming the hottest model on dealer lots.

In-vehicle technology is the top selling point for 39 percent of car buyers today - more than twice the 14 percent who say their first consideration is traditional performance measures such as power and speed - according to a study by consulting firm Accenture released in December. That’s why cars that talk, show drivers the way and steer them from harm will cover the floor of this week’s auto show in Detroit.

“Consumers are increasingly looking for solutions that allow them to stay connected to their digital lives wherever they are,” said Thilo Koslowski, auto analyst for researcher Gartner Inc. “This will actually make cars the coolest mobile device going.”

Automakers at the North American International Auto Show in Detroit, which opens to the public Saturday, will be looking to push beyond what’s on the road today such as Telsa Motors Inc.’s ModelS, with a large tablet computer on its dashboard that runs a version of Google Maps for navigation, and Ford Motor Co.’s Sync system, which the company credits for attracting customers even as it’s been criticized for imperfections.

As the difference between first and worst in auto quality has narrowed, the connected car is becoming the next frontier in how automakers distinguish themselves.

At the auto show, General Motors Co. will tout its 4G LTE-connected Chevrolets while Ford introduces more applications that work with its voice-activated Sync system, including those that allow drivers to activate a home security system from the car.

Suppliers and carmakers will show models that read hand gestures to control entertainment or scan eye movements to adjust where gauge displays are projected, and listen and respond with the clarity of Apple Inc.’s Siri system for the iPhone.

The number of cars connected to the Internet worldwide will grow more than sixfold to 152 million in 2020 from 23 million now, according to researcher IHS Automotive. GM, Volkswagen AG’s Audi luxury line and Tesla each revealed latest plans to offer Web connections in their cars, including Wi-Fi hot spots for tablets and laptops.

“People spend a lot of time in their car, so connecting their car to their life and making it seamless has got a lot of upside,” Alan Batey, head of GM’s Chevrolet brand, said in an interview. “It connects with people who previously, perhaps, hadn’t thought of Chevrolet as the brand for them.”

Racing to see which automaker can behave most like a tech company, Detroit executives have taken to bragging about apps and bandwidth, in addition to torque and towing ability.

“The car is becoming just another device in the Internet of things,” Raj Nair, Ford’s group vice-president of product development, said in an interview. “Increasingly, you must be a technology company to be in a leadership position in the auto industry.”

At the International Consumer Electronics Show in Las Vegas, Ford unveiled Habu, a mood-music app for its Sync system that finds music playlists to match drivers’ moods, including when they’re feeling angry, somber or sexy, according to the automaker. Other new apps will allow Ford owners to reserve a parking space or order a Domino’s pizza.

The revenue and profit possibilities of the connected car go beyond the thousands of dollars automakers charge for these high-tech options, Koslowski said. By 2017, one-fourth of all automakers expect to earn money from e-commerce transactions drivers make from the car, Koslowski forecast.

“The automakers can take a cut of these transactions because this is their device platform,” Koslowski said.

That profit potential explains why automakers are pouring billions of dollars into developing connected cars, according to a study released earlier this month by the Center of Automotive Research. The average car now contains 60 microprocessors and more than 10 million lines of software code - more than half the lines of code found in a Boeing Co. Dreamliner airplane - according to the study.

That’s a big change from a decade ago, when James Grace was working to engineer “infotainment” features into GM cars while arguing with executives who said, “People don’t care about this,” he recalled.

“Ten years later, good luck finding an auto company without a massive organization around the connected car,” said Grace, now director of advanced engineering for Panasonic Automotive Systems.

Technology giants also are piling on.

Last week, Google Inc.

announced an alliance with GM, Honda Motor Co., Hyundai Motor Co. and chipmaker Nvidia Corp. to get the Android operating system into cars. Apple already is working with Bayerische Motoren Werke AG, Daimler AG’s Mercedes-Benz, GM, Nissan Motor Co., Honda and others to get its iOS operating system into cars through devices such as the iPhone. Microsoft Corp. has long provided the Sync system to Ford and even tried to hire away the automaker’s CEO, Alan Mulally.

The intersection between the tech and auto companies could be a treacherous one for Detroit. If the tech companies define the terms of the connected car, automakers risk losing control of their own cockpits and the revenue that will flow from them, said Mark Wakefield, a director of the Detroit office of consultant Alix Partners.

“The worst-case scenario for the automakers is going to a generic interface where you plug your phone or iPad into the center console,” Wakefield said. “They want to differentiate their cars. They’d rather not compete strictly as value appliances.”

At the auto show, the three Detroit automakers are expected to demonstrate just how different they are as they show off their latest high-tech features. In addition to its 4G connectivity, GM is rolling out new applications including iHeartRadio, the Weather Channel and NPR.

Ford’s new apps include those that allow drivers to reserve a parking space or order Domino’s pizza. Ford said that 94 percent of the 2014 model vehicles it has sold have been equipped with Sync and that three-quarters of its buyers would recommend the system to other car buyers.

“It’s why people are coming to our showrooms,” Nair said.

Information for this report was contributed by Tim Higgins of Bloomberg News.

Business, Pages 23 on 01/13/2014