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 Telecoms and technology firms are looking to tap an expected surge
in demand for so-called machine-to-machine (M2M) communications - or
using the internet to get products from cars and washing machines to
turbines and medical equipment to carry out more tasks, more
efficiently.
Cars are at the forefront of the new industry, as manufacturers
strive to add new features such as streaming music, playing audio
books, navigation aids and security improvements to their vehicles.
Only about 10 percent of vehicles currently have built-in
connectivity to the internet, but that number is expected to rise to
more than 90 percent by 2020, according to British consulting firm
Machina Research.
Vodafone said on Monday it had agreed to buy Cobra Automotive
Technologies, which provides products aimed at improving car
security, telecommunications and vehicle tracking for the automotive
and insurance industries.
"The combination of Vodafone and Cobra will create a new global
provider of connected car services," said Erik Brenneis, Director of
M2M at Vodafone.
"We plan to invest in the business to offer our automotive and
insurance customers a full range of telematics services."
Other mobile operators are also investing in the M2M industry - also
known as "the internet of things" - looking for new sources of
income as stiff competition and regulation slow growth in their core
market.
For example, Verizon Communications, the largest U.S. wireless
carrier, spent $612 million in cash in 2012 to buy Hughes Telematics,
which sells products including GPS tracking, communications and
safety features in cars.
OWNING THE SERVICES
Technology companies are also deeply involved.
Earlier this year, Apple unveiled its CarPlay technology, which
integrates its iPhone with a car and allows drivers to use certain
apps on the dashboard with Siri, the voice-enabled assistant, to
view maps, make calls, listen to music and send and receive text
messages.
In other industries, examples of M2M technology already in use
include smart meters which monitor energy usage at homes, or devices
in offices which tell an owner when their coffee machine needs
re-stocking.
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Enders analyst James Barford said mobile operators were still
undecided whether they wanted to provide just the network
capabilities for M2M communications or actually compete with IT
providers to manage the services themselves.
"Although there is scope to have a very large number of connected
devices in due course, typically the volume of traffic that goes
over them is pretty low because it's just logistics data," he said.
"Increasingly more of the value is in the service wrapped around it.
This is a small move towards owning more of the services."
The GSMA, the trade body for mobile operators, estimates there were
195 million M2M connections in 2013, with the highest usage seen in
the car and consumer electronics industries.
Vodafone said it would offer 1.49 euros a share to buyout
shareholders in Italian group, around 50 percent higher than its
previous closing price.
Cobra's majority shareholder Intek Group said in a statement it had
agreed to tender its 51.4 percent stake in Cobra for 74.3 million
euros.
At 1015 GMT, Cobra shares were up 49 percent at 1.473 euros, while
Vodafone's stock was down 0.5 percent at 194.05 pence.
($1 = 0.7345 Euros)
(Editing by Sarah Young and Mark Potter)
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