In the first two months of the fourth quarter, AT&T sold more than 6.4 million smart phones, which would beat its second largest quarter for smart phone sales and it still has December holiday sales to come, Ralph De la Vega, president and CEO, AT&T Mobility, told an audience at the UBS Global Media and Communications Conference, Dec. 5, in New York.
“We had a tremendous start to the holiday season. Smart phone sales are on a record pace,” De la Vega said. “This puts AT&T at more than 23 million in smart phone sales so far and on track to exceed 26 million by the end of the year.” He credited the carrier’s smart phone and tablet lineup and the success of its Mobile Share program for the growth.
Even as AT&T rides the smart phone wave, moving at a clip of more than 100,000 smart phones sold every day, it appears to be prepared for the day when the market is saturated with the devices. De la Vega also announced milestones in the carrier’s efforts to bring wireless to our cars, homes and wallets.
“We are seeing the emergence of new billion dollar opportunities in wireless, such as Digital Life, the Mobile Wallet and the Connected Car,” de la Vega said. “All of this is creating a ton of momentum for our wireless business. The best is yet to come.”
De la Vega announced that AT&T has been granted UL approval for an all-IP, all-digital wireless home security, monitoring and automation system, known as Digital Life, which features wireless sensors and wireless connectivity to the carrier’s call center. And it is controlled by, you guessed it, smart phones and tablets. The product will be available in AT&T’s retail stores and dealerships in early 2013.
“The home security and automation market is an $18 billion dollar industry with 35 percent margins,” De la Vega said. “We feel very good that we have a new technology that sits on top of our great wireless infrastructure. It will be available nationwide, wherever AT&T has service.”
De la Vega stressed that the carrier’s recently announced $14 billion initiative to build out its network to cover 300 million pops lays a foundation for future growth opportunities, like Digital Life and Connected Car, which will leverage the 4G LTE base that it is building with the smart phones and tablets.
“Now we can put on top of that [network] value-added services that are beyond just data access,” de la Vega said. “They are a whole new wave of services that generate revenue for AT&T.”
De la Vega also discussed AT&T’s Connected Cars initiative, in which the carrier is working with manufacturers and software developers to create connectivity from vehicle to vehicle, vehicle to infrastructure, as well as to backseat infotainment systems. Vehicle software and firmware will be updated remotely, and passengers will be able to purchase and down load songs, audiobooks and guides wirelessly.
“This a huge growth opportunity,” de la Vega said. “By 2016 [ABI Research] has said telematics will grow to where 53 percent of cars will have connectivity, but I think that estimate is low. Having a nationwide low-latency network will be important.”
AT&T is not alone in this push toward the connected future, beyond using smart phones for texting and surfing the Web. In January 2012 at the Consumer Electronics Show, Verizon Wireless and In Motion Technology announced the development of a mobile gateway that turns a vehicle into a secure, mobile hotspot. The onBoard system also includes a network management system that monitors network health and communications, with a mobile-optimized VPN server providing end-to-end security.
In June 2012, Verizon Communications bought Hughes Telematics, which plays in the automotive and fleet telematics marketplace. This purchase gave Verizon an introduction into the emerging machine-to-machine (M2M) services applications field. Hughes is implementing connected services for vehicles based on safety, security, convenience and infotainment.
Deutsche Telecom is striving for $10 billion in revenues from mobile Internet, including connecting cars and cameras, as well as homes.
“The trajectory looks very good. We have only scratched the surface,” Rene Obermann, DT CEO, told analysts early in December in Bonn, Germany. “The cars get connected. Cameras from Samsung now have a radio interface for connectivity. You don’t need much imagination to see the possibilities of connectivity and it has just taken off.”