Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

AT&T Inc. (T) and Sirius XM Radio Inc (SIRI) Working to Convert Nissan Cars Into Smartphones On Wheels

AT&T Inc. (T)The future of a driver-less car remains uncertain. However, automakers are working in alliance with other companies to give their buyers a driver-less experience. The second largest US wireless operator AT&T Inc. (NYSE:T) joined forces with Sirius XM Radio Inc (NASDAQ:SIRI) and entered into a deal to work on an Onstar-like telematics system for Nissan cars. The telecom provider would give mobile connectivity to Sirius XM Radio Inc (NASDAQ:SIRI) telematics system and incorporate in Nissan’s North American cars to provide better security services in the car. Several features are expected to come along with Nissan’s vehicles lineup in the near future.

Let’s take a closer look as to what all can we expect in the next Leaf or Altima.

Smarter cars in the making

Sirius XM Radio Inc (NASDAQ:SIRI) has an agreement with Nissan to provide robust features for its cars with a range of services that include weather forecast, navigation, traffic assessment and other similar features. In fact, telematic services have advanced much more and all this is routed through data connection. This is exactly where Sirius needs AT&T Inc. (NYSE:T)’s network. Pricing of the telematic suite has not been announced yet.

The telematic solutions in cars would add safety, provide emergency assistance in accidents and other mishaps, track vehicles in case they are stolen, other roadside support, offer voice enabled technology and several infotainment services not announced yet. Glenn Lurie, President at AT&T Inc. (NYSE:T) defined future vehicles as ‘smartphones with four wheels’ that would provide owners with a safer journey and brilliant customer experience. Nissan cars powered by Sirius XM Radio Inc (NASDAQ:SIRI)’s integrated telematics solutions using the Dallas carrier’s built-in internet services, would offer drivers and passengers the experience of a connected car.

Connected vehicles would be able to communicate with one another, which will help in avoiding mishaps. Such cars would be able to assess traffic conditions on the road, spot if there is any maintenance needed, and even connect to Wifi hotspots. Sirius is working to merge cellular network connectivity with satellite to widen the variety of in-vehicle telematic services and innovative features to the drivers. Sirius and AT&T Inc. (NYSE:T) are not the only ones to partner for incorporating such services in Nissan cars.

Another connected carmaker

General Motors Company (NYSE:GM) partnered with Verizon Communications Inc. (NYSE:VZ) to work on the Onstar service. However, early this year, the lead US automaker replaced Verizon Communications Inc. (VZ) with AT&T Inc. (NYSE:T) for its high speed wireless service. The Detroit carmaker expects car sales to increase on account of Onstar service as the automaker plans to expand services by providing advanced application.

Phil Abram, Chief Executive of General Motors Company (NYSE:GM) declined to comment on why the company switched from Verizon Communications Inc. (NYSE:VZ) to AT&T for wireless services. The Onstar deal is one of the biggest agreements for AT&T Inc. (NYSE:T). The telecom provider has lately been particularly aggressive to strike such deals in order to diversify as the wireless market is getting saturated and competition from smaller rivals is getting tougher.

While AT&T looks pretty focused in working out ways to drive its revenue growth to keep investors happy, how important is the partnership for Sirius XM Radio Inc (NASDAQ:SIRI)?

How serious is Sirius?

Sirius XM’s tie up with AT&T adds value to both the companies. Sirius XM Radio Inc (NASDAQ:SIRI)’s primary purpose is to go beyond providing just a premium audio experience in cars. The company can set any price for the customers to provide its connectivity solution claiming that it gives emergency assistance, self detection technology identifying maintenance need, roadside support and other such services.

Investors are concerned to know if connected cars will actually drive automotive sales and help Sirius XM make money in the long term. Here lies the answer – the company is experiencing a good number of buyers who are interested in purchasing a connected car.

As per a recent research report by Telefonica, almost 90% of cars will be connected by 2020. This means huge business for Sirius XM and AT&T Inc. (NYSE:T) as well, who are jointly working on developing the in vehicle telematics solution. This also suggests that automakers that are preparing to offer connected cars to their buyers, stand to gain as connected vehicles is the future of the automobile industry.

My takeaway

Future Nissan cars will be much more than what they are today. They will possess amazing features keeping customers’ safety as the priority. Nissan buyers are being assured of experiencing a connected journey while safety is assured. Sirius XM Radio Inc (NASDAQ:SIRI) has always tried to offer services that are unique and different, and this time with Nissan, the company is working to develop the universe of its functionality.

All eyes will be set on Nissan cars as it rolls out its models. Which versions or models of Nissan would have these built-in features? What would the price be? For AT&T the risk is the least as this is not core to the carrier’s business. However, if this happens to be successful, the telecom provider would gain another line of solid business. On the other hand, for Sirius the success of this telematic solution and its commitment to Nissan is of much higher importance. How soon will drivers witness the bliss of connected cars is still not announced. However, what remains to be seen is how well this new concept will be received by the masses.

The article AT&T and Sirius XM Working to Convert Nissan Cars Into Smartphones On Wheels originally appeared on Fool.com and is written by Rajesh Marwah.

Rajesh Marwah has no position in any stocks mentioned. The Motley Fool recommends General Motors. Rajesh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.