4G Data Service in Cars Offers Amazing Potential, Familiar Challenges

At the recent L.A. Auto Show, Audi announced a new feature in automotive technology. It’s not as eye-catching as the rear spoiler on a Mercedes SLS AMG, but the 2015 Audi A3 will provide 4G service running at 100Mbps directly into the car.

Yes, passengers will be able to tap in with iPads over a hotspot. More importantly, cars services such as 3D navigation will run much faster — especially when it comes to rendering maps along your route.

For those familiar with information technology, the first question is this: How will infrastructure change? Having a car connect at that speed opens up a world of possibilities — video chats between drivers, real-time prediction engines that monitor where you drive and suggest alternatives, or even HD video streaming to the rear entertainment system. But there are a few problems — namely, the connection between cars doesn’t exist yet, the prediction engines are in beta and HD can hog bandwidth.

CIO.com asked industry insiders, automakers and analysts to find out how 4G data service in cars will work this year (and beyond). Once the infrastructure matures, there are some amazing possibilities — and a few new obstacles that only IT experts can resolve.

Benefits of 4G in the Car: Better Diagnostics, Analytics, Audio

Before tackling the IT challenges, it’s important to understand how drivers will benefit from the faster service. Ashley Twist, an innovation strategist at the marketing agency Engauge, has studied the trends in connected vehicles. One of the most interesting benefits, she says, is providing more information to the driver about vehicle diagnostics.

When cars are more connected, automakers can feed drivers relevant data such as brake pad level, the day they should change the air filter or the minor problem that needs attention before it escalates. (Today, services such as OnStar already alert drivers to low tire pressure.) The implication is that this diagnostic information can also be shared, as an opt-in measure, with your insurance company and mechanic. The car could tell the insurance company that a window is broken, submit the claim, order the repair and bill the provider before a driver even leaves for work, Twist says.

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Rusty Lhamon, the director of machine-to-machine technology at T-Mobile U.S.A., says the 4G-connected car will provide a greater bandwidth for devices such as smartwatches, tablets and smartphones. Audio technology will improve, with better fidelity than today’s cars, while video chat features could allow a technician to call in after a crash or roadside issue and troubleshoot with a driver face-to-face while examining the car’s internal systems. Finally, real-time traffic information will also improve, Lhamon says, mostly by addressing the latency issues that exist today.

Matt Dirks, a senior client partner at Acquity Group (part of Accenture Group), says the 4G-enabled car could usher in an age of more data-driven analytics. Insurance companies will better tap into opt-in data for “good driver” discounts without relying on aftermarket add-ons, he says, while car dealers could provide a “smart reception” service that works like a virtual concierge for new customers.

‘Legacy’ Cars, Compatibility, Pricing Will Present (Familiar) Challenges

Of course, of the biggest challenges the auto industry faces when it comes to connected cars concerns adoption levels. The problem is all too familiar to IT execs: There are millions of “legacy” cars on the road, and none will be able to connect to that new 2016 BMW X1.

Twist says IT professionals will have to rise to the challenge and figure out how to make after-market systems, such as those from Delphi and OnStar, work with the latest 4G-enabled systems in newer cars. For example, for a video chat between cars, IT might need to develop standards for the connection and video format that works across multiple cellular carriers and car systems.

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Compatibility issues could also arise. Lhamon says automakers will be the stakeholders in setting the overall vision. Ultimately, the in-car system has to meet the needs of the driver. Added to that, he says, wireless carriers will have to lead the charge on making sure the connection is fast and robust. Hardware suppliers such as Continental, Harman International, Parrot and Denso face compatibility issues between car makes and models, as do the telematics and cloud service providers such as IBM, Cisco Systems, Agero and Airbiquity.

“The cellular-embedded module used in a car must meet automotive-grade standards, which have higher requirements than embedded modules for most consumer devices,” Lhamon says. “Auto-embedded modules are certified for operation in harsh and ‘mission-critical’ environments, requiring stringent compliance for operating temperature and reliability, among others.”

Amrit Vivekanand, a spokesman for the semiconductor company Renesas Electronics America, says pricing presents another challenge. This is another issue familiar to IT execs: Setting costs for services. Today, many automakers provide 3G and Wi-Fi service free of charge for the first year or two of ownership. OnStar currently costs $29.90 per month for a concierge service, directions and automatic 911 calls. 4G services could include HD video streaming, video phone calls, route-sharing with other drivers and much more.

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“The primary roadblocks for 4G LTE in the North American automotive market are licensing with mobile operator partners,” Vivekanand says, using contracts with car companies as an example, “and determining a pricing model that’s attractive to consumers as well as the OEMs and mobile operators.”

Dirks says there are also technical challenges. Having very high-speed connections in moving vehicles could stress cell towers, and there may be a need for faster hand-offs to avoid dropped connections. (When you lose a connection while texting at the office, that’s one thing. Having a video chat fail when a technician is telling you how to fix a problem in your car is another.)

While the IT challenges seem almost insurmountable, the technology is imminent. The Audi A3 will hit dealers next spring, and Ford, GM, and BMW will likely follow suit with high-speed offerings. (GM has announced it will move to 4G LTE with OnStar.) There’s still time to solve the problems — and boost more than just the engine speed of future cars.

John Brandon is a former IT manager at a Fortune 100 company who now writes about technology. He has written more than 2,500 articles in the past 10 years. You can follow him on Twitter @jmbrandonbb. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn.