New Market Opportunities for Satellite Start to Emerge From Global Connectivity Boom
[Via Satellite 02-26-2015] The “connected car” and “smart cities” are two potentially new and exciting markets the satellite industry could play in over the coming years, particularly the former as the potential for “always-on” connectivity could be a big draw for satellite. Andrew Lee, principal consultant on automotive and transportation at Frost & Sullivan, says this is a burgeoning market and that car manufacturers want to make connectivity more dynamic. In its own consumer survey, Frost & Sullivan found two out of five drivers still use their smartphone rather than their navigation system, which shows a fairly significant lack of faith from customers (drivers) in these in-built navigation and connectivity systems.
However, there are also compelling reasons why car manufacturers would want to boost capabilities in terms of connectivity. Lee said the two biggest pain barriers are recalls and warranty costs. A system where updates can be done over-the-air, rather than cars having to go back to sellers could save car manufacturers a significant amount of dollars.
“Last year, there were two recalls in the United States; both were related to a potential fire hazard. GM had 370,000 vehicles. Tesla had 29,000. GM’s direct cost was $100 per vehicle. It took GM five months to do 80 percent of the updates. There is a 20 percent risk for GM to be sued here,” he added. “The estimated cost for Tesla was $20 a vehicle. They turned it into a publicity stunt: 100 percent were updated overnight. One of the key pain points was to do with recalls.”
Lee said satellite will be one of the ways in which car manufacturers collect data.
“Over-the-air updates require continuous connectivity [and] 3G systems are not known for their reliability. There needs to be a way of keeping that continuous connectivity,” he said. “The automotive industry thinks satellite connectivity is costly. … [but] we do see connected cars as a huge growth area. Satellite is one of the key technologies that will play a role, but, the question is, how it will work? It will be on a case-by-case basis.”
One of the other potential growth areas for the satellite industry, which was discussed at the recent Connectivity Conference in London, was the concept of “smart cities” and the role the satellite industry could play in it. Martin Wiesner, director of satellite and smart cities at Stream Technologies, works with a number of local governments as they look to “get smart.”
So, what does a smart city entail? This naturally involves a higher degree of connectivity, which would be used for smart buildings, smart traffic management, smart parking management, smart street lighting, as well smarter grids, etc. For example, Wiesner spoke of a situation in China where there is a potential role for satellite to play. “China is building 20 cities at a time, and looking 20 or 30 years in the future at a time [with these smart cities]. They want to talk to one connectivity supplier. With smart city development, you need to be on a menu of connectivity. What we see with people in China is they don’t have a problem with satellite. The first question they have is how easy is it? It is then easier to accept a use for it,” says Wiesner. “We all know data backhauling can be done in a secure manner over satellite. A lot of low power radio data needs to be backhauled. Satellite, to these guys, seems complicated. It is very easy if you have someone that understands it. There is a very big opportunity for satellite to participate in smart cities.”
When asked what his advice would be to satellite companies seeking to play in this space, Wiesner added, “Satellite needs to be relevant. It needs to be on the menu [for smart city developers]. It has to be easy to integrate. If you are not on the menu, at least be partners with companies that are on the menu. Satellite is more difficult to understand, [so] we need to make it easier to integrate with other technologies. Satellite is both ahead of its time and seen as an old technology. There is room for satellite for a long time. Smart cities will need a lot of connectivity and we should share in that.”