Vodafone has agreed to buy Italian car electronics maker, Cobra Automotive for USD 197 million for improving car security, telecommunications and vehicle tracking for the automotive and insurance industries. Vodafone aims to connect more products to the Internet and fuel growth in its core mobile phone business.
Post acquisition, Both companies will create a new global provider of connected car services and plans to offer a wide range of telematics services.
Times of India says: 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% of vehicles currently have built-in connectivity to the internet, but that number is expected to rise to more than 90% by 2020, according to British consulting firm Machina Research.
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 US 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.
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% 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% at 1.473 euros, while Vodafone’s stock was down 0.5% at 194.05 pence.
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.
To contact the author, email at email@example.com.