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Qualcomm, Ford Plan to Start
Joint Venture With Telematic Unit
By REBECCA BUCKMAN, PUI-WING TAM and KAREN LUNDEGAARD
Staff Reporters of THE WALL STREET JOURNAL
Ford Motor Co., finally muscling into the emerging market for in-car
communication services, is expected to announce a joint venture Monday
with Qualcomm Inc. to deliver wireless services to automobiles, including a
mobile-phone service, according to people close to the deal.
The move is Ford's long-awaited leap into so-called telematics services,
which include bringing phone, Internet, entertainment, navigation and safety
services to vehicles. Rival General Motors Corp. offers some of those
services now through its OnStar unit. Onstar and the Qualcomm-Ford
venture, tentatively called Wingcast, will now become rivals in the contest
to define standards and brand-name power in the emerging
mobile-commerce market. Auto makers believe telematics and mobile
commerce will be a lucrative source of revenue, assuming government
concerns about the safety of on-board communications devices don't limit
consumers' ability to use the new services.
Wingcast will be based in San Diego, where
wireless-communications powerhouse
Qualcomm has headquarters, people close to
the deal said. Ford, Dearborn, Mich., is
expected to be the largest shareholder, and
the company could soon grow to about 300
employees, one of these people said.
Wingcast's chief executive is expected to be former Microsoft Corp. Vice
President Harel Kodesh, who led Microsoft's wireless efforts until his
departure earlier this year. During his tenure, Microsoft experimented with
in-car computing technology through a project called "AutoPC." The
project is still active but is now housed outside the wireless group.
Wingcast systems could be rolled out in one million Ford cars in model
year 2002, according to the people close to the deal, and included in
another three million Ford vehicles the following year. By 2004, every
Ford car could be equipped with a wireless system, these people said.
Besides Ford, the fledgling company already has another customer: Nissan
Motor Co. plans to integrate Wingcast services into its Nissan and Infiniti
brands, the people close to the deal said.
Until now, Ford has moved more cautiously than GM into the potentially
lucrative telematics business through a limited deal with Sprint Corp. For
the 2001 model year, basic in-vehicle communications systems will only be
available on Ford's Lincoln brands and European Focus model. It isn't
clear what will happen to Ford's relationship with Sprint once Wingcast
launches. Meanwhile, GM is targeting more than one million subscribers to
its OnStar service by the end of this year-services are already offered on
27 models.
Wingcast will develop a communication system based on Qualcomm's
CDMA, or code division multiple access, wireless technology, the people
close to the venture said. Other vendors will work with Wingcast to make
the system's hardware, which will include devices attached to the inside of
cars as well as mobile phones drivers can take with them.
Most of the system's data will be stored on a central computer server,
however, and not in the Wingcast devices. That means drivers will be able
to access the service from inside their cars, from their phones or even from
a home computer, the people close to the deal said. A driver looking for a
car in a crowded parking lot, for instance, could use the Wingcast mobile
phone to automatically honk the car's horn or turn on its lights.
When high-speed networks replace today's slower Internet connections,
Wingcast could introduce even more advanced services, such as
entertainment. One example: A driver sitting at home at night in front of a
personal computer could program the kind of music he or she would like
to hear on a car's digital music system the next morning -- or, perhaps, use
voice-recognition technology to simply talk to the in-car system.
The system will also be designed for safety, so that Wingcast would
automatically call 911 if a car's air bag deployed.
When asked about Ford's seemingly slow pace into telematics at a press
luncheon earlier this month, Brian Kelley, Ford's vice president in charge of
e-commerce strategies, said speed wasn't the issue in this race. Ford plans
only a "very thin layer of this technology in the vehicle," he said. "But the
real changes and the real upgrades occur on a network that sits outside the
car."
Mr. Kelley offered other hints as to how Ford might approach wireless car
services. Consumers want a flexible, portable system they can upgrade, he
said. And as for other, fancy services, consumers in focus groups said they
valued safety most. That way, "when the air bag deflates … instantly
someone [would] show up on the scene," Mr. Kelley said. "And then what
will happen is the navigation and the information and the entertainment."
Car makers are salivating at the chance to have a constant revenue stream
from consumers, compared with the one-time sale price they now receive.
GM has predicted revenue from such ventures could ultimately hit $1
billion annually, though the company is still heavily subsidizing OnStar.
Wingcast is expected to offer several different subscription offers to people
who buy a new car, much like the different calling plans peddled by
wireless carriers, one person close to the project said. The most basic
ones would focus on emergency services, while consumers would pay
more for entertainment options or more minutes on their mobile phones.
Because the service would include basic wireless service, Wingcast could
compete with other carriers, though it would also have to partner with them
to get airtime for its customers.
Write to Rebecca Buckman at rebecca.buckman@wsj.com and
Pui-Wing Tam at pui-wing.tam@wsj.com and Karen Lundegaard at
karen.lundegaard@wsj.com |
