Embedded Modem or Smartphone: What is the Best Way to Bring the Internet to the Car?

More and more automakers are putting modems in their vehicles to essentially turn the car into a smartphone on wheels. An embedded modem is “always on” even when the car is not, opening the door to features like remote vehicle start, locking/unlocking, remote car diagnosis and vehicle tracking. The car owner can then easily manage these functions through a smartphone companion app provided by the automaker.

The companion app gives the user a glimpse into the vehicle anytime and anywhere. While in the car, it’s possible to enjoy a number of different connected experiences; streaming music from apps embedded in the head unit, finding new points of interest along the highway, setting a navigation route and getting real-time traffic and weather updates, just to name a few.  Many car commercials also heavily promote utilizing the embedded modem to create a Wi-Fi hotspot so multiple smart devices in the car can obtain an internet connection.

These features are great, but unfortunately they can come at a high cost. The promise of an embedded modem and connected solution is dependent, ultimately, on somebody paying for the data used in the car. Up to now, data fees have either been paid by the car maker and included in the price of the car or charged to the car owner through monthly data plans. When the car owner is asked to sign up for an additional monthly data plan it’s usually through a specific wireless carrier.  Some carriers offer the ability to add your vehicle to an existing wireless plan if you happen to have the same carrier the automaker is using, which is convenient for a subset of users but inevitably creates frustration for those who may already have a plan with a different carrier.  Adding a data plan for upwards of an additional $20-40 a month just for the car doesn’t seem to make much sense, especially when you consider that the majority of use cases enabled by the plan, apart from remote control, can also be done on the smartphone. Also, there are costs involved for the car maker in supporting an embedded modem, including hardware, integration, and certification fees, which can quickly add up.

Despite the cost issue, embedded modems are great for unique use cases such as remote vehicle access and controls. In almost every other case, a hybrid integration approach wherein the customer can utilize their existing smartphone, data plan and wireless contract to bring connectivity to the car proves a much more efficient and cost-effective solution.

Smartphone-centric solutions allow drivers to utilize their existing phone and data plan to bring internet connectivity to their in-car experience. This approach can also prove cost-effective for car makers by eliminating the extra expense of the embedded modem, allowing them to offer data connectivity in lower end platforms that may not be capable of supporting the fees needed for an embedded modem. The customer would be much happier knowing they can utilize their existing data plan to enable connectivity in the car without the need for a separate contract or additional wireless contract, and the car maker wins by providing the connected car experience the market is increasingly demanding without breaking the bank. It will be interesting to chart the progress of both embedded and smartphone-centric approaches to connectivity as the industry moves forward. As with most things, it’s safe to assume that the consumer will ultimately decide which approach will dominate.