Toyota, Ford, iHeart, Pandora, and lemmings

As you probably heard, Toyota issued a teaser news release confirming that they will be integrating iHeart Radio into future models of Toyota vehicles. That is great news. However, the details of exactly how they will do it are still not revealed. Judging from past announcements from Ford about Pandora and Stitcher, BMW about Radiotime, and Smart about the Smart Drive app for iPhone though, it is a safe bet that if it ships in 2011, it will be a tethered solution, requiring the user to "dock" their smartphone with the auto. Now, we all know how I feel about tethering (it is a poor consumer experience that will prevent a truly mass market), but for 2011 it is the only real choice. This is because the car electronics shipping now were defined, at best, 18 months ago and more typically, 36 months ago. At that time, data plans were about $60 per month - far out of band for the typical consumer. Now, driven by the tablet market (thank you again, Steve), dedicated data plans from Verizon, T-Mobile, Sprint, and AT&T are dropping like rocks. The $20 plan for 1GB from Verizon is very reasonable for a dedicated Internet connection in the car. One that would allow the typical commuter to enjoy off-board navigation, local search, social networking, and, of course, Internet radio. This pricing opens real possibilities, but it is unclear how automakers will leverage the potential.

The route that automakers will take in 2011 is not a mystery. They will use tethering to bring smartphone apps into the dashboard. Resulting in some functionality for the consumer but leaving each car looking eerily like the other while they all ape my smartphone. The question really is, what will automakers do for 2013 and beyond? Will they continue to jump like lemmings off the cliff while they chant the mantras of "tethering" and "app stores"? Or will they push beyond to create unique Internet solutions in the dashboard that present compelling, differentiated Internet radio experiences? As I keep saying, the driver needs to be able to power on, turn the knob, and enjoy great music without having to worry about getting their phone set up before they turn the key. This same ease of use needs to apply to all connected services in the car. A combined automotive experience for the dashboard, including Internet radio, will require about 800MB of data per month. $20 per month is pricey, but it is within the upper bounds of consumer acceptance. It enables a new way of thinking about Internet in the car.

Ford seems to be aggressively trying to rebrand their company as a consumer electronics company. Headlining at CES, CTIA and other unusual venues, Ford wants to become associated with those rocketing markets instead of the PR-impaired auto industry. Judging from the relative valuation CE and mobile companies (think Apple) I think that is a brilliant, if difficult, move. The other automakers see this leap and are marshaling their own effort to tap into the content/electronics/mobile/apps enthusiasm. They are all looking for their own "SYNC killer" in the same way that tablet makers are looking for iPad killers. Toyota's announcement, for example, indicates that this is a teaser for CES 2011, showing their own intention to increase their branding in the consumer electronics market. However, desire and intent do not guarantee success. Will automakers deploy "me too" solutions that stagnate on tethering and apps or will they leapfrog the current Ford SYNC and create solutions for the car that are truly tailored to the unique capabilities of the car platform: unlimited battery power, no weight limits, far more accurate sensors, and, of course, great sound.

Will automakers embrace the possibilities and move towards KITT? or will they shrink back give us Nokia terminal mode at 2 frames per second? The future is being written right now.