The penetration of Wi-Fi in embedded car infotainment systems is set to reach nearly 60% in North America by 2019, according to a new study from ABI Research.
As noted by the market-research companies, a number of luxury brands have already launched LTE-based Wi-Fi hotspots solutions in the past year – with US operator AT&T (Dallas, TX, USA) announcing several tie-ups at this year’s Consumer Electronics Show in Las Vegas.
ABI Research expects most major original equipment manufacturers to follow suit, with General Motors (Detroit, MI, USA) claiming that it will start offering LTE-based Wi-Fi hotspot solutions in its vehicles in 2014.
Car companies are especially keen to replace costly rear-seat DVD players with Wi-Fi connected screens, taking advantage of the latest 802.11ac Wi-Fi standard.
The 802.11ac protocol comes with a number of advantages over older Wi-Fi standards, including higher data throughput and reduced latency.
Combined with LTE connectivity, it could support a host of new high-bandwidth services for passengers and provider greater interactivity, allowing customers to play games online or connect to social media networks.
According to ABI Research, Wi-Fi-based rear-seat video streaming can consume large volumes of data and the transmission costs of such services are likely to be high.
“Although some early adopters and premium customers might be willing to pay an extra $15 to $30 per month for the convenience of built-in Wi-Fi connectivity, most drivers will not be willing to pay for an automotive wireless plan on top of home broadband and mobile phone subscriptions,” sais Gareth Owen, principal analyst at ABI Research.
ABI Research notes that passengers could always access Wi-Fi connectivity directly via their smartphones or by tethering these to head-units, but says this is likely to result in weaker signal reception and possible service interruptions.
“If the in-car Wi-Fi market is to develop, car OEMs will have to work with mobile operators to develop new initiatives such as the introduction of shared data plans which would enable consumers to add cars to existing tariff plans,” adds Owen.
AT&T is already offering mobile plans that bundle vehicle services with smartphone tariffs.