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.
Join the discussion: Would having the Internet in the car be your dream come true, or a nightmare? What online functions would you like to have while behind the wheel?
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 |
