Car makers such as Audi and GM are integrating LTE wireless technology in their new models, offering customers faster access to the Internet but not much choice since they have both signed deals with AT&T.
Audi of America on Monday unveiled a partnership with AT&T at the International CES trade show in Las Vegas, where in-car connectivity and entertainment is a big trend.
Audi's 2015 A3 family will get advanced navigation; Facebook and Twitter alerts; access to more than 7,000 Web radio stations; and personalized RSS news feeds via AT&T's LTE network. Up to eight devices can also access the Internet over the in-vehicle Wi-Fi hotspot, according to the German car maker. To connect, owners can add their car to an existing AT&T smartphone or tablet data plan, it said.
Next, Audi plans to roll out LTE connectivity across its entire lineup as new or refreshed models come to the market, it said.
Audi isn't the only car maker working to integrate AT&T's LTE service. At CES, GM announced that the 2015 Chevrolet Corvette, Impala, Malibu and Volt will be the first of its models to get LTE connectivity. In Europe, Renault and Orange have partnered, but their plans are not at an advanced stage.
For users, these deals are a double-edged sword. They offer faster in-car connectivity but also limit choice since the vehicle manufacturer -- not the car buyer -- has chosen AT&T. But that could change because of a specification for embedded SIMs announced by industry organization GSM Association in December.
The embedded SIMs are installed at the point of manufacture and can then be remotely provisioned as well as modified wirelessly. That makes it easier and cheaper for companies such as car makers to switch operators or allow their customers to choose the operator they want.
The first products are expected to come this year and the specification is backed by a number of large mobile operators including AT&T, China Mobile, Deutsche Telekom, NTT DoCoMo, Orange, Telefónica and Vodafone. Audi didn't immediately respond to questions about its interest in the embedded SIMs.
The growing popularity of LTE in cars and other types of vehicles is also showing how the technology is starting to make inroads into the machine-to-machine (M2M) sector, where 99.5 percent of cellular connections still use 2G or 3G networks, according to Machina Research. By 2018, LTE's share of connections will be almost 30 percent and by 2022 almost 70 percent, it said in a recent report.
To date, the demand for 4G connectivity has been restricted to a select few high-bandwidth applications such as emergency response, security video and automobile entertainment, but as the price of LTE modules come down that will change, according to Machina.
But choosing LTE isn't just about the improved performance it offers, because many applications that today use 2G, which today is more than 60 percent of all apps, simply don't need it. Instead, operator plans to close down 2G networks will drive the need to upgrade to LTE and or 3G.
Companies embedding connectivity in devices with lifespans of more than two to three years have to evaluate their choice of network. Company's need networks that meet a specific application's needs and have to take into account the network's longevity to avoid costly module replacement in the future, Machina said.