AT&T, Inc. (T) has entered into partnerships with three large automobile manufacturers – Tesla Motors, Inc. (TSLA), Chevrolet and Audi, in a bid to drive the expansion of the connected vehicle technology popularly known as M2M (machine-to-machine) communications. This technology captures the advantage of next-generation data speeds, ranging from voice-controlled apps to highly developed diagnostics and aims to considerably augment the infotainment experience.
A typical mobile M2M messaging system establishes a wireless communications link to connect a group of devices to a computer server or another device for the purpose of transmitting data contained within those devices. The M2M market provides the opportunity to mobile-enabled millions of devices, like cars, utility meters, vending machines and consumer electronics devices to get connected to a wireless network.
Next-generation (4G) technology is also boosting the growth of M2M segment as it provides exceptionally high speeds. Massive throughput and low-latency period of LTE technology enable easy access for large-scale applications like fleet management, security, automotive, navigation, and video content.
Notably, with the introduction of the 2015 A3 family, AT&T will work in partnership with Audi and provide the drivers with the fastest in-vehicle 4G LTE data connectivity. The new A3 family will feature the most sophisticated version of Audi Connect with picture navigation, read-aloud news headlines, Facebook and Twitter post facilities and access to over 7,000 internet radio stations.
In addition, passengers will be able to connect to the car's in-vehicle WiFi hotspot and stream high-definition video on up to eight devices. Audi will also become the first automaker to present a mobile share data plan alternative to AT&T wireless customers who wish to include their vehicle within their existing plan, in addition to other mobile devices. Moreover, Audi intends to roll out the 4G LTE capacity across its complete lineup of cars.
Likewise, Chevrolet has also strategized to propose an OnStar 4G LTE connection that will run on AT&T's network and grant drivers access to the latter’s efficient data speeds. This option will be accessible in the 2015 Chevrolet Impala, Corvette, Malibu and Volt models. The company plans to extend the facility further to the Equinox, Silverado, Silverado HD, Spark and Spark EV models.
The carrier has also entered into an agreement with Tesla to connect all its current and future models with AT&T’s high speed wireless network. Per the contract, all Tesla models will use AT&T’s wireless infrastructure to power engine diagnostics, telematics and infotainment features including Internet radio option, web browsing, live traffic, weather conditions and navigation. Notably, all the functions will be available through the 17-inch touchscreen installed in Tesla’s models.
Also, recently, AT&T announced that Samsung has agreed to be a sponsor and partner of its connected-car lab in Atlanta – Drive Studio. Moreover, five developers including Glympse and Audiobooks.com will be offering their apps on the AT&T Drive platform.
Stock that Warrant a Look
AT&T currently has a Zacks Rank #3 (Hold). Some better-ranked stocks in the Communication Services industry are Shenandoah Telecommunications Co. (SHEN) and Vonage Holdings Corp. (VG), both with a Zacks Rank #1 (Strong Buy).
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