The connected car and the smart home are currently the most important IoT (internet of things) sectors for operators, as they experiment to find business models which could save them from the dumb pipe role in this new area of wireless growth. The car and the home allow many cellcos to stay in their comfort zone of consumer-facing services, but they will need to avoid the mistakes that allowed the smartphone experience to be stolen away by device brands and over-the-top giants.
Verizon’s latest attempt is a new car sharing service which would rely on its network and carry its brand. Called Verizon Auto Share, it would enable users to search for the nearest available car in the sharing service, using the special app, and then reserve it and use their smartphones to unlock and start the vehicle.
The program – which goes up against more conventional ad hoc rental services like ZipCar, as well as a similar handset-based offering from Daimler called car2go – will be available late this year.
This shows how carriers are belatedly learning that one route to incremental revenues and customer loyalty is to control the overall user experience in particular, attractive apps – as Apple has done for years. This is a good route for Verizon because it controls the network, the app and the cloud-based service – although as in every other market, the operator’s own-branded offerings will have to compete with over-the-top alternatives. Verizon knows that providing a service, not just the connectivity to support it, can lead to premium fees or revenue shares, but in the IoT, it may well be more realistic for the cellcos to provide the back end management to power a service branded by a big brand in the vertical sector – in this case a car maker or rental firm.
However, this is a good example of an experimental offering which allows the operator to play around with various models and see how consumers respond in the wild west of mobile IoT. Mark Bartolomeo, head of IoT connected solutions at Verizon, said there was a trend in the US towards car sharing rather than ownership, especially among younger urban inhabitants. And this area is one in which Verizon could add value in every part of the process, he said, transferring established expertise in authentication, mobile payments, security, mobile cloud services and back end integration – all of which are essential in more conventional smartphone apps. And once Verizon is in the car, it can offer other options such as in-car WiFi or gas refilling apps.
Verizon’s Enterprise Solutions unit also plans to extend Auto Share to the public sector, in areas such as municipal transit authorities offering car pooling.