Commerce Connected

5G Can Drive More Connected Vehicle Value — But Battles Remain

5G smart car interior

Everything else is getting smarter these days — homes, phones, wearables and even clothing — so why shouldn’t the same standard apply to automotive wheels?

Yes, wheels promise to gain more intelligence in the coming years — a reflection not only of the emerging ecosystem of connected vehicles, but the 5G future. The new 5G mobile technology, which is faster speeds and robust data transmission, promises to change a host of industries and economic sectors large and small. Among them is the automotive industry, and a brief look at the potential future of automotive wheels and tires shows why.

Here’s what’s happening, according to such source material as Spectrum.IEEE: Pirelli, a leading global tire brand, “has developed the Cyber Tire, a smart tire that reads the road surface and transmits key data — including the potential risk of hydroplaning — along a 5G communications network.” The article described a recent test of the smart tire technology: “Using an Audi A8 as its test car, Pirelli’s network-enabled tires sent real-time warnings of slippery conditions to a following Audi Q8, taking advantage of the ultra-high bandwidth and low latency of 5G.”

That serves as a glimpse of the 5G future when it comes not only to the connected vehicle ecosystem but the looming arrival of autonomous cars and trucks (including for freight). But that’s not all that is happening in this world that will impact 5G and automobiles. Some of the developments are taking place in the courtroom.

Legal Battle

Earlier this year, a U.S. judge ruled that Qualcomm, the world’s largest supplier of mobile phone chips, is a monopoly and has to change the way it does business. Qualcomm is trying to overturn that antitrust decision; appeal proceedings are expected to begin in January.

If Qualcomm wins its case on appeal, the cost of connected cars using 5G technology will skyrocket, automakers and suppliers said in court filings in late November.

The legal saga started in 2017 when the Federal Trade Commission (FTC) accused Qualcomm of operating a monopoly and charging exorbitant licensing fees. As part of the ruling, Qualcomm must submit annual compliance reports to the FTC for the next seven years. Qualcomm’s opponents want the antitrust decision to stand. Trade groups representing the U.S. divisions of BMW, Ford, General Motors, Toyota and others are weighing in ahead of the court date about the negative effects of Qualcomm’s licensing practices.

Intel Corp told the court that Qualcomm’s licensing practices forced it to sell its smartphone modem chip business to Apple at “a multi-billion dollar loss.” German supplier Continental AG and Japan-based Denso — makers of “infotainment” and location-tracking car technology — also weighed in, as did other patent holders. They alleged that Qualcomm would not license its technology to chip makers that charge only a few dollars per chip. Instead, Qualcomm looks to sign licenses only with higher-end automakers who would be “less motivated to fight for every dollar” in license fees.

“The resulting inefficiency is ultimately borne by consumers in the form of higher prices,” the auto suppliers argued in a court filing, Reuters reported. Qualcomm should negotiate directly with the suppliers to avoid “unnecessary, costly, and inefficient licensing negotiations” with the automakers themselves. “The suppliers that incorporate chips into their products likely are ready to negotiate with Qualcomm,” the groups wrote.

5G Automotive Value

The stakes of all this are pretty high, though it is hard to get a precise measurement. But PYMNTS research has done the heavy lifting of estimating the value of the connected car ecosystem — value that is sure to be boosted with the arrival of 5G mobile network technology in the coming years and over the coming decade.

The average American has a 51-minute round-trip commute five days a week, PYMNTS research found. That’s a lot of time to kill. However, those consumers are finding ways to connect, and they already power some $230 billion worth of commerce. The more efficient those connections — the less friction those in-vehicle transactions have — the more commuters are likely to spend.

And that’s the real payments and retail value for 5G in the automotive world.

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