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How About a Data Plan With That Car?

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More than 62 million consumers will have web access in their cars by 2016, according to new figures from iSuppli, vs. fewer than 1 million this year. Predictably, the U.S. is expected to lead the charge with more than 28 million connected drivers by that time. But while the market represents a huge opportunity for mobile players, it also poses a challenge for the carriers that will provide connectivity to those cars.

On-board connectivity is already being used in telematics systems for navigation and other low-bandwidth uses. But that will change as cars become increasingly connected to the web via embedded offerings (mostly on higher-end cars) and through smartphones that interact with telematics systems. And the automotive market is looking to mirror the mobile space with app stores that distribute offerings for on-board usage. (For an in-depth look at building apps for electric vehicles, see this GigaOM Pro report, sub. req’d). That growth could spark a surge in demand for silicon, giving an added boost to chip makers, which are already benefiting from the increase in smartphone adoption.

But on-board connectivity is a double-edged sword for the mobile network operators that will provide much of the content to drivers and their passengers. Streaming audio and video are a natural fit for in-car consumption and could ramp up data revenues in a big way, but they also weigh heavily on the network. That kind of usage can bring a network to its knees, as iPhone users know all too well. So operators looking to tap the automotive market will need to make sure their infrastructure can handle the kind of data-heavy uses that consumers are sure to demand from their connected cars.

Photo courtesy Flickr user jasonEscapist.

3 Responses to “How About a Data Plan With That Car?”

  1. Having a separate data plan for the car does not make sense. What does make sense and what is already happening, is sharing the phone’s data plan with the car’s devices.

  2. It will not fly, if I need to sign up for another data plan. People will want to utilize their existent data plans, not pay for a new one. If that was the case, people would still have dedicated car phones today.